The adoption of the popular stablecoin Tether (USDT) has surged. It constitutes a massive 80% of all crypto transactions in the country. As per Brazil’s tax agency, the total USDT transactions in Brazil for 2023 reached approximately $271 billion Brazilian reais ($55 billion USD).
This figure is nearly doubled the volume of Bitcoin (BTC) transactions. All summed up, BTC transactions stood at $151 billion reais ($30 billion USD).
USDT beats Bitcoin in Brazil
It has been remarkable to observe how USDT positioned itself at the top in Brazil. USDT first surpassed the volume of Bitcoin transactions in July 2022. Back then, it highlighted a significant shift in the Brazil’s crypto landscape.
However, there was downturn in crypto transactions in same year. Brazil experienced a drop of nearly 25% in volume standing at only $154.4 billion reais ($31 billion USD) by year-end.
Tax authorities take tough stance on Crypto sector
Brazil’s tax agency has expanded its oversight. From January 2024 Brazil will start recognizing crypto as “financial assets” for tax purposes. The country’s parliament passed a bill in regards to this earlier this year.
Profits from foreign investments ranging from 6,000 to 50,000 reais (roughly $10,000 to $100,000 USD) will be subject to a 15% tax rate. Upon that, a flat 22.5% tax rate is introduced for amounts exceeding this threshold. Profits from crypto sales exceeding 35,000 reais ($7,000 USD) will be taxed between 15% to 22.5%.
Circle also changes its strategy
World’s second-largest stablecoin issuer, Circle, is also shifting its focus towards non-U.S. markets. Especially in countries like Brazil where adoption is rapidly gaining momentum.
Circle’s CEO, Jeremy Allaire, recently revealed a surprising statistic, stating:
We estimate that 70% of USDC adoption is non-US, and some of the fastest growing areas are emerging and developing markets
It highlights the growing global influence of stablecoins and their potential impact on financial systems across continents.
The surge in USDT adoption in Brazil, alongside these significant regulatory changes, has placed the country to become a crypto hub. More investors flock to the stablecoin scene it remains to be seen how these developments will impact Brazil’s financial landscape.
