Worldcoin ordered to suspend incentives for biometric data

Brazil has ordered Worldcoin to cease offering its digital tokens or any other compensation to Brazilians in exchange for their biometric data, joining a growing list of countries that have ruled against the blockchain project.

Elsewhere in South America, digital asset adoption is surging across Chile, Argentina, and Mexico, with weakened fiat currencies and costly cross-border transfer services among the factors pushing more people to digital assets.

Worldcoin token payments halted in Brazil

In Brazil, the country’s data protection agency has ruled against Worldcoin’s token-for-data operation. The National Data Protection Authority (ANPD) ordered Tools For Humanity (TFH), Worldcoin’s parent company, to suspend the payments, which it offers via its native token, WLD, to residents who provide their biometric data, including eye scans on its controversial orbs.

ANPD has been investigating Worldcoin—now known as World Network—since it launched in Brazil last November. It determined that the tokens offered in exchange for the data interfere with consent as defined by local data laws. ANPD noted that this consent over sensitive personal data must be “free, informed, unequivocal and provided in a specific and highlighted manner and for specific purposes.”

Worldcoin has relied on the “free” WLD tokens it offers to attract the masses for biometric scanning. From the onset, it mostly targeted developing economies, where the 25 WLD tokens it offers (worth around $50 at current prices) have a significant impact on the lives of the recipients.

In countries like Kenya and Indonesia, thousands of locals queued for hours for iris scans to receive the tokens. In Kenya, the project lured so many participants that it was ordered to conduct operations only outside the city centers, as the queues were causing chaos and becoming a security concern. Many Kenyans we spoke to were unaware of how their biometric data would be used or stored, but the appeal of ‘free money’ was too good to turn down.

Brazil’s ban is based on the same concerns that free money could blind residents to the danger of surrendering their data.

“…the monetary consideration offered by the company may interfere with the free expression of the will of individuals by influencing the decision regarding the provision of their biometric data, especially in cases where potential vulnerability and insufficiency make the weight of the payment offered even greater,” ANPD noted.

Additionally, the agency expressed concern at Worldcoin’s structure, which doesn’t allow individuals to request that their data be deleted or revoke their consent.

The project remains adamant that it hasn’t broken any law and said in a statement that it is in talks with the ANPD.

“[We] are confident [we] can work together with the authorities to ensure the continued ability of all Brazilians to fully participate in World Network,” it said.

Weak currencies, economic instability spur adoption in Latin America

As Brazil forces Worldcoin to cease some of its activities, other countries in South America are recording skyrocketing digital asset adoption, reports say.

Chainalysis included four Latin American nations in its list of the top 20 countries with the highest adoption, and while Brazil still leads, Venezuela, Mexico, and Argentina are catching up.

According to Sebastian Reyes, who heads analytics services at Chilean fintech company Vita Wallet, the region’s economic instability and weakening currencies have played a major role in spurring digital asset adoption.

“There is more interest throughout Latin America, and people are much more aware of the solutions available. Growth in the region is driven by access to dollar-linked assets, which help protect savings, and by the ease and speed of international transfers,” he told a local outlet.

Latin American regulators are still struggling with policing the nascent industry, like many of their peers globally.

In Chile, the government is gradually getting a handle on ‘crypto’ regulations and now requires all virtual asset service providers (VASPs) to receive a license before serving investors.

“In the long term, these limits will allow for a more robust market, with greater certainty and volume, which will attract new users,” Reyes believes.

While different nations face varying challenges across Latin America, there’s a shared discontent with legacy finance. A recent study by Coinbase (NASDAQ: COIN) and market research firm Ipsos found that LATAM nations, led by Argentina, are highly distrusting of banks and other traditional financial institutions, want more financial freedom, and believe blockchain and digital assets could be the best solution.

Watch: What can organizations do to get on the Web3 & digital identity bus?