How Brazil’s Gen Z Is Driving Growth in Stablecoins and Income Tokens

Brazil’s Generation Z is emerging as a central force in the country’s expanding cryptocurrency ecosystem, particularly through their adoption of stablecoins and income tokens. This demographic accounts for the majority of new crypto wallet registrations in 2025, highlighting a shift in how younger Brazilians engage with financial services outside traditional banking frameworks.

What happened

Throughout 2025, Brazil saw a significant increase in digital asset activity driven primarily by individuals aged 18 to 25. According to data from CoinDesk, over 60% of new crypto wallet registrations in the country were attributed to Gen Z users. Among these new entrants, the most widely used stablecoins are USDT (Tether) and BRZ, the latter being a Brazil-specific stablecoin pegged to the Brazilian Real.

CoinDesk also reports a 150% surge in trading volume for income tokens within Brazil over the past year. Income tokens, which distribute periodic yields or dividends to holders, have gained traction mostly among the younger demographic. This trend corresponds with findings from the Brazilian Central Bank, which confirm a 40% year-over-year rise in digital asset transactions nationwide. The Central Bank’s disclosures particularly note increased stablecoin usage for remittances and everyday payments.

Brazilian fintech startups, as represented by the Brazilian Fintech Association (Fenabran), attribute this growing crypto adoption among Gen Z users to a lack of trust in traditional banks and a preference for more accessible financial products that offer yield generation. These fintech firms report that younger users are drawn to crypto assets as alternatives to conventional banking services.

On the regulatory front, filings with the Brazilian Securities and Exchange Commission (CVM) reveal that stablecoin issuers in Brazil have begun to comply with new anti-money laundering (AML) and know-your-customer (KYC) regulations introduced in mid-2025. However, enforcement of these rules remains inconsistent, according to CVM analyses.

Industry observers and analysts interpret these developments as indicative of a broader reshaping of financial inclusion in Brazil. The influx of Gen Z users into stablecoins and income tokens is seen as expanding access to financial products beyond traditional systems, particularly benefiting underbanked populations. Some analysts suggest that this shift could compel established banks to innovate and integrate blockchain-based services to maintain their customer base, as noted in Banco Central do Brasil reports.

Why this matters

The surge in stablecoin and income token adoption among Brazil’s Gen Z carries structural implications for the country’s financial ecosystem. By bypassing traditional banking infrastructure, this demographic is effectively accelerating financial inclusion, offering new avenues for participation in digital finance to those who may have been underserved by conventional institutions.

Stablecoins, especially those pegged to the Brazilian Real like BRZ, provide a bridge between volatile cryptocurrencies and the local economy, facilitating everyday transactions and remittances with greater stability. The increased use of income tokens also signals a demand among younger Brazilians for alternative income sources amid economic uncertainty, reflecting a broader search for financial empowerment.

From a regulatory and policy perspective, the rise in crypto adoption among young Brazilians presents challenges and opportunities. The incomplete enforcement of AML/KYC regulations highlights potential vulnerabilities in consumer protection and financial system integrity. At the same time, the Central Bank’s data underline the growing importance of digital assets in the national payments landscape.

Moreover, the trend may pressure traditional banks to adapt by incorporating blockchain technologies or offering yield-generating products to compete with emerging fintech alternatives. This dynamic could reshape the competitive landscape of Brazil’s financial services sector over the coming years.

What remains unclear

Despite the data on adoption rates and transaction volumes, several key questions remain unanswered. There is limited publicly available information on the exact volume and value of income token holdings segmented by age, which constrains understanding of the financial exposure and risk profiles of Gen Z users.

The long-term sustainability of income tokens’ yield models is also unclear. It remains to be seen how these models will perform if income tokens become more widely adopted and what their broader economic impact might be on Brazil’s financial system.

Regulatory enforcement data on AML and KYC compliance among stablecoin issuers is sparse, making it difficult to assess the effectiveness of recent regulatory measures or the potential risks of illicit activity.

Additionally, the socio-economic profiles of Gen Z adopters beyond their age—such as income levels, education, and geographic distribution—are not well documented, limiting deeper insights into who is driving this crypto boom and why.

Finally, the macroeconomic implications of widespread stablecoin use for Brazil’s monetary policy and banking sector have not been fully explored in the available disclosures, leaving open questions about potential systemic risks or benefits.

What to watch next

Further regulatory updates and enforcement actions by the Brazilian Securities and Exchange Commission regarding AML/KYC compliance among stablecoin issuers.
Data releases from the Brazilian Central Bank detailing the evolving role of stablecoins and income tokens in payments and remittances.
Responses from traditional Brazilian financial institutions, including any blockchain-based service offerings or yield products introduced to compete with fintech alternatives.
Emerging research or disclosures on the socio-economic characteristics of Gen Z crypto users to better understand the demographic and economic drivers behind adoption.
Analysis on the sustainability of income token yield models and their potential macroeconomic impact as adoption scales.

The rapid adoption of stablecoins and income tokens by Brazil’s Generation Z marks a significant shift in the country’s financial landscape, with important implications for inclusion, regulation, and market structure. However, key data gaps and regulatory uncertainties remain, underscoring the need for ongoing monitoring as this trend develops.

Source: https://www.coindesk.com/business/2025/12/20/brazil-s-gen-z-drives-crypto-boom-as-stablecoins-income-tokens-surge. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.