Stablecoin Usage Surges in Brazil, with USDT Leading the Way
Brazil’s Special Department of Federal Revenue, Receita Federal, has reported a significant increase in the usage of stablecoins, particularly Tether-issued USDT. This rise can be attributed to the growing adoption of stablecoins as a means of payment by Brazilians in response to rising inflation.
USDT Dominates Trading Volume
Stablecoins make up around 10% of global cryptocurrency trading volume, and they are considered a safe haven during market volatility due to their fiat currency peg. Additionally, stablecoins are popular among crypto investors due to their predictability and suitability for various financial transactions.
Receita Federal has been monitoring the growth of stablecoins in Brazil since 2019. Their data shows that USDT, along with other stablecoins like USDC and BRZ, are the most traded stablecoins in the country.
USDT Outperforms Bitcoin
In terms of trading volume, stablecoins have surpassed Bitcoin in Brazil. According to Receita Federal’s research, USDT accounts for 80% of recorded crypto transactions, making it the most traded digital currency in Brazil over the past 10 months.
The trading volume of USDT in Brazil during this period was over 271 billion Brazilian reals (~$54 billion), which is double the trading volume of Bitcoin. Globally, USDT also had a higher 24-hour trading volume compared to Bitcoin.
Growth Raises Regulatory Concerns
While the growth of stablecoins is positive for the crypto industry in Brazil, it raises significant regulatory concerns. The surge in stablecoin trading volume is likely to lead to increased regulatory scrutiny on the crypto industry.
Receita Federal has been monitoring the usage of USDT, particularly due to its implications for tax. The increased prominence of stablecoins like USDT in crypto transactions could result in stricter regulation of crypto assets.
In September, the Central Bank of Brazil’s governor linked the surge in crypto imports to tax evasion and illicit activities, indicating that regulations on cryptocurrencies will be tightened.
Hot Take: Stablecoin Surge Reflects Growing Adoption in Brazil
The significant increase in stablecoin usage, particularly USDT, in Brazil highlights the growing adoption of digital currencies as a means of payment. With rising inflation and market volatility, stablecoins provide stability and predictability for financial transactions. However, this surge also raises regulatory concerns and may lead to increased scrutiny on the crypto industry. As Brazil tightens regulations on cryptocurrencies, it remains to be seen how this will impact the future growth and usage of stablecoins in the country.
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