Tether Dominates Crypto Transactions in Brazil, Doubles Bitcoin's Trading Volume
Summary:
Tether (USDT), a stablecoin, makes up 80% of Brazil's cryptocurrency transactions, doubling Bitcoin's trading volume. Aided by an AI-powered system, Brazil's tax authority not only tracks crypto activities domestically but also targets overseas crypto investments of its citizens. Crypto sales earnings exceeding specified limits are subject to progressive tax rates, with new tax regulations awaiting implementation in 2024. Both global and local crypto exchanges are operational in the country.
In Brazil, the stablecoin Tether (USDT) has remarkably grown in popularity, making up 80% of the country's entire cryptocurrency dealings, as per the information from Brazil's tax authority. Tether transactions in the country hit $271 billion Brazilian reais (equivalent to $55 billion) as of mid-October this year, far exceeding Bitcoin transactions valued at $151 billion reais ($30 billion). Stablecoins like USDT are a type of cryptocurrency modeled to maintain a steady value through linking to traditional currencies like the US dollar or the Brazilian real.
Transaction volumes of USDT in Brazil have been climbing since 2021 but surpassed those of Bitcoin for the first time in July 2022, amidst the turbulence in the cryptocurrency market following the downfall of crypto lenders Three Arrows Capital and Voyager Capital. During this crypto downturn, Brazil's total crypto dealings shrank by nearly a quarter in 2022, settling at $154.4 billion reais (around $31 billion), as revealed by the government.
The Brazilian tax body keeps tabs on citizens' crypto transactions through a technologically advanced system, utilizing artificial intelligence and network analysis. This system is capable of highlighting dubious activities and tracking the whereabouts of individuals trading in cryptocurrencies.
The tax authority also focuses on digitals assets owned by Brazilians abroad. A law recognizing cryptocurrencies as "financial assets" for tax purposes in foreign investments was passed by the local Congress on 25 October. From January 2024, gains derived in foreign lands ranging between 6,000 to 50,000 reais (about $10,000) will be taxed at a rate of 15%. For amounts exceeding this limit, the rate increases to 22.5%.
Since 2019, Brazilian authorities have mandated crypto exchanges operating in the country to report all customer transactions. Capital gains from digital asset sales surpassing 35,000 reais (around $7,000) monthly are exposed to a rising tax range of 15% to 22.50%.
Global crypto exchange giants like Coinbase, Binance, Bitso, and Crypto.com maintain operations in Brazil, alongside local entities such as Mercado Bitcoin and Foxbit.
Published At
10/29/2023 6:42:47 PM
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