Real Falls 12% After Election as Brazilian Companies’ Interest in Digital Dollars Grows

Key Facts

Market turmoil in Brazil after the election renewed attention on companies’ efforts to find dollar-based hedging tools, as the real and the country’s stocks fell on October 26. The Bovespa index dropped 10%, while the Brazilian currency weakened about 12% against the dollar, and government bonds due in 2056 lost nearly 3 cents on the dollar, according to Reuters Breakingviews. An earlier draft cited two figures for a surge in USDT activity on the Mercado Bitcoin platform and the share of corporate accounts, but they could not be verified against the original report or open sources. Those figures therefore cannot be used to estimate the scale of institutional demand for stablecoins on election day. Market turmoil came as attention focused on the election result’s implications for the exchange rate and domestic assets.

EL7 data show the dollar closed at 4.9652 reais on October 23, then the dollar-real pair closed at 5.3767 on October 26. That move is consistent with the roughly 12% currency decline reported by Reuters Breakingviews that day, though the closing data and the context for the percentage came from different sources. In the stablecoin market, USDT closed at 0.99837 against the dollar on October 26, according to EL7 data. This reading records the stablecoin’s price on that date and does not by itself establish its trading volume in Brazil or its use by companies. The real also rose about 2% to around 5.31 per dollar on October 27, a partial rebound after falling more than 11% in the previous session, according to Reuters.

The October 26 decline extended to stocks and long-dated bonds: Reuters Breakingviews said the Bovespa fell 10% and government bonds due in 2056 lost nearly 3 cents on the dollar. In a later report, Reuters said the index had closed down 13.9% in the previous session, then rose 1% on October 27 as the market recovered. The 10% decline cited in the Breakingviews report differs from the 13.9% closing loss reported by Reuters the following day; each figure therefore remains tied to its source and description. Finance Minister Dario Durigan said the market reaction the previous day was linked to positions investors had taken in recent days, adding: "It was not a reaction to fundamentals." The minister’s comments offer the government’s explanation for the move, while investors focused on the incoming administration’s fiscal path.

After Luiz Inácio Lula da Silva won the runoff and was re-elected president of Brazil, investors focused on whether the incoming administration could make a credible fiscal adjustment while preserving social spending and investment. They also watched Lula’s choice of key economic officials, according to Reuters. These issues put fiscal policy and the makeup of the economic team at the center of investors’ assessment of the direction ahead, alongside the market volatility seen in the country after the election. Available sources do not support describing the victory as surprising; they confirm his re-election in the runoff without that characterization. Against this backdrop, the real and stocks remain in focus as the incoming administration’s choices take shape.

Earlier announcements about payments infrastructure indicate that stablecoin use in Brazil extends beyond discussion of election-day hedging. In March 2026, Ripple said Banco Genial uses its infrastructure to make same-day dollar payments, and that Nomad uses it for treasury flows between Brazil and the United States, with the option to settle in stablecoins. The company said Ripple Payments had processed more than 100 billion dollars in payments globally, with coverage across more than 60 markets. In June, Blockchain.com announced an institutional expansion in Brazil with a cross-border liquidity solution, saying its infrastructure enables companies to move and settle funds internationally using USDC and USDT. Brazil’s Matera also partnered with Circle to offer banks balances in reais, dollars and USDC within a single environment, aiming to facilitate payments and avoid the delays and costs of correspondent banks.

In a survey published by Ripple in October 2026, 69% of participating finance leaders in Brazil and Mexico said they use stablecoins for payments or plan to do so within two years, compared with 54% globally. But potential expansion faces regulatory and operational challenges: 39% of respondents cited compliance complexity as a major obstacle, while 48% of financial institutions identified regulatory clarity as their top concern. These are results of a Ripple survey and describe respondents’ views and plans, not the actual scale of use on election day. As for the next economic indicator, the Brazilian Institute of Geography and Statistics set October 30, 2026, as the estimated release date for the monthly reading of the continuous PNAD survey for September. Markets are awaiting the release while also tracking the incoming administration’s approach to fiscal discipline and its choice of economic officials.