Stablecoin Tether Dominates Crypto Transactions in Brazil
Data from Brazil’s revenue service agency reveals that stablecoin Tether (USDT) has gained significant popularity in the country, accounting for 80% of all cryptocurrency transactions. In comparison, Bitcoin (BTC) transactions only make up 20% of the total volume. So far this year, USDT transactions in Brazil have reached $271 billion Brazilian reais, which is nearly double the volume of Bitcoin transactions at $151 billion reais.
Rising Adoption Since 2021
The adoption of USDT has been steadily increasing in Brazil since 2021. However, it surpassed Bitcoin in transaction volume for the first time in July 2022. This shift occurred during a challenging period for the crypto industry, marked by the collapse of crypto lenders Three Arrows Capital and Voyager Capital.
Impact of Crypto Winter
The overall volume of crypto transactions in Brazil experienced a decline of nearly 25% in 2022 due to the crypto winter. The government reported that the total value of transactions amounted to $154.4 billion reais (~$31 billion).
Tax Agency’s Monitoring System
The Brazilian tax agency utilizes a sophisticated system powered by artificial intelligence and network analysis to track citizens’ crypto-related activities. This system can detect suspicious behavior and trace individuals’ trading locations.
New Legislation on Crypto Investments
The local Congress recently passed legislation recognizing cryptocurrencies as “financial assets” for tax purposes in foreign investments. Starting from January 2024, earnings between 6,000 and 50,000 reais (~$10,000) will be subject to a 15% tax rate. Amounts exceeding this threshold will face a higher tax rate of 22.5%.
Regulations on Crypto Exchanges
Crypto exchanges operating in Brazil have been required to disclose all user transactions to the government since 2019. Capital gains from crypto sales exceeding 35,000 reais (~$7,000) per month are subject to a progressive tax bracket ranging from 15% to 22.50%. Both global exchanges like Coinbase, Binance, Bitso, and Crypto.com, as well as local players such as Mercado Bitcoin and Foxbit, operate in the country.
Hot Take: Stablecoin Tether Emerges as Dominant Force in Brazilian Crypto Market
The rise of stablecoin Tether (USDT) in Brazil has been remarkable, with the cryptocurrency accounting for 80% of all crypto transactions in the country. This surge in adoption has positioned USDT ahead of Bitcoin (BTC) in terms of transaction volume. The implementation of a sophisticated monitoring system by the Brazilian tax agency has allowed for effective tracking of citizens’ crypto activities. Additionally, new legislation recognizing cryptocurrencies as financial assets for tax purposes demonstrates the government’s increasing regulatory focus on the industry. As Brazil’s crypto market continues to evolve, stablecoins like USDT are likely to play a significant role in shaping its future.
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