Data from Brazil's revenue service agency shows that stablecoin Tether (USDT) has had a notable upsurge in acceptance, making up 80% of all cryptocurrency transactions in the nation.
Nearly twice as many Brazilian reals (about $55 billion) were exchanged for USDT as there were for Bitcoin (about $151 billion) as of mid-October, when the quantity of BTC transactions in the nation was just $151 billion. Stablecoins are digital currencies that are intended to maintain a consistent value, typically linked to the value of fiat currencies such as the Brazilian real and the US dollar.
Since 2021, USDT transactions have increased in Brazil; but, in July 2022, during the height of the cryptocurrency industry's storm last year, when crypto lenders Three Arrows Capital and Voyager Capital failed, USDT transactions finally overtook Bitcoin volume for the first time.
According to government reports, the crypto winter reduced the amount of cryptocurrency transactions in the nation by over 25% in 2022, to $154.4 billion reais, or almost $31 billion. The Brazilian tax office uses a complex system based on artificial intelligence and network analysis to monitor persons' activities linked to cryptocurrencies. A blog post claims that the technology can track down anyone who trade cryptocurrency and identify any questionable activities.
The revenue department is also focusing on cryptocurrency holdings that its nationals who live abroad own. Legislation recognizing cryptocurrencies as "financial assets" for tax purposes in foreign investments was passed by the local Congress on October 25. Beginning in January 2024, earnings made abroad that fall between 6,000 and 50,000 reais (~$10,000) will be taxed at a rate of fifteen percent. Over this amount, taxes will be charged at a rate of 22.5%.
Cryptocurrency exchanges based in Brazil have been obligated since 2019 to report to the authorities all user transactions. Gains from selling cryptocurrency that surpass 35,000 reais (~7,000) a month are taxed at a progressive rate ranging from 15% to 22.50%.
Alongside regional businesses like Mercado Bitcoin and Foxbit, international cryptocurrency exchanges like Coinbase, Binance, Bitso, and Crypto.com are active in the nation.