A New Frontier in Economic Alliance: Brazil and Japan Commit to Web3 Innovation

Brazil and Japan share a rich history of friendship, underpinned by strong economic ties and the world's largest Japanese diaspora in Brazil. This relationship was further solidified in early May 2024, when Brazil's President Lula and Japan's Prime Minister Kishida met to enhance strategic partnerships. They signed 38 memorandums of cooperation focusing on innovation, cybersecurity, and more.

Web3: A New Frontier for Cooperation

Web3 technology is a burgeoning area of focus in the Brazil-Japan relationship, with Brazil aiming to boost trade and attract Japanese investment and technological advancements. The decentralized nature of Web3 excites tech enthusiasts, investors, and governments in both countries, promising a new era of the internet.

Governmental Efforts to Foster Web3 Growth

In mid-April 2024, Japan's Liberal Democratic Party unveiled a Web3 whitepaper, aiming to position Japan as a Web3 hub. The document emphasizes decentralized autonomous organizations (DAOs) and international cooperation. This focus on Web3 is bolstering Brazil-Japan efforts to leverage digital technologies for economic growth.

Back in August 2023, Brazil's Anatel and Japan's Ministry of Internal Affairs and Communications signed an agreement to develop open radio access network (RAN) deployments and other digital technologies. This collaboration aims to build flexible, cost-effective Web3 infrastructure tailored to each country's needs.

Private Sector Initiatives

Japanese enterprises are also keen on Brazil's Web3 potential. In January 2024, TradeWaltz, a Tokyo-based trade management platform, partnered with Covantis to streamline trade between Brazil and Japan. Covantis handles about 80% of Brazil's grain and oilseed exports, with support from Japan's Ministry of Economic, Trade, and Industry.

SoftBank's $200 million investment in Mercado Bitcoin, one of Latin America's largest cryptocurrency exchanges, and MUFG Bank's partnership with Banco Bradesco for Web3-based cross-border payments via Ripple, underscore the private sector's commitment to this technological frontier.

Brazil's Web3 Landscape

Brazil is fertile ground for Web3 innovation, thanks to its tech-savvy population, high cryptocurrency adoption, and vibrant fintech sector. The country's supportive startup environment and academic interest in blockchain position it well for Web3 growth.

Brazil leads Latin America's crypto economy, bolstered by crypto-friendly legislation and the introduction of Drex, its digital currency infrastructure. A Central Bank of Brazil report highlighted that Brazilians hold $50 billion in crypto assets, compared to $16 billion in U.S. stocks.

Private enterprises are also keen to expand Brazil's crypto-friendly population. A survey showed that 41% of Brazilians currently or previously owned digital assets.

Japan's Web3 Initiatives

Japan is equally focused on Web3 for economic growth. Despite challenges like the Digital Agency's troubled My Number ID system rollout and underlying risk-aversion, Japan is pushing forward with Web3 initiatives. In February 2024, Japan's Cabinet approved a bill allowing crypto assets to be included in investment limited partnerships, a common investment method in startups.

Japan is also revamping its semiconductor industry, crucial for Web3's computational needs. In February 2024, Taiwan Semiconductor Manufacturing Company opened Japan's advanced semiconductor facility in Kumamoto. Samsung also announced plans for a research and chip development facility in Japan.

Conclusion: A Promising Path Ahead

Beyond Web3, Brazil and Japan collaborate on sustainability, infrastructure, and energy. However, Web3 offers a unique pathway for economic success. Brazil's high crypto adoption rates and acceptance of Web3, coupled with Japan's investments and technological expertise, promise significant long-term economic opportunities for both nations.

‍