Kenne Michael 
According to data from Brazil’s revenue service agency, Tether has experienced a substantial increase in adoption in the country, accounting for 80% of all cryptocurrency transactions.
By mid-October of this year, USDT transactions in Brazil totaled $271 billion Brazilian reais ($55 billion), nearly double the volume of Bitcoin transactions in the country, which totaled $151 billion Brazilian reais ($30 billion).
Stablecoins are cryptocurrencies designed to have a stable value, typically pegged to fiat currencies such as the U.S. dollar and the Brazilian real.
Since 2021, USDT transactions in Brazil have been on the rise, but they surpassed Bitcoin volume for the first time in July 2022, just as Three Arrows Capital and Voyager Capital collapsed amid the crypto industry’s disruption last year.
The government reported that the crypto winter reduced the volume of crypto transactions in the country by nearly 25% in 2022, ending at $154.4 billion reais, or $31 billion.
The Brazilian tax agency employs a sophisticated system that relies on artificial intelligence and network analysis to monitor citizens’ crypto-related activities.
According to a blog post, the system is capable of detecting suspicious activity and tracking the location of cryptocurrency traders.
The revenue agency is also pursuing cryptocurrency investments held abroad by citizens.
The local Congress passed legislation on October 25 recognizing cryptocurrencies as “financial assets” for taxation on foreign investments.
Beginning in January 2024, foreign earnings between 6,000 and 50,000 reais ($10,000) will be subject to a 15% tax rate. Above this threshold, the tax rate will be 22.5%.
Since 2019, Brazilian cryptocurrency exchanges have been required to report all user transactions to the government.
Capital gains on transactions of cryptocurrencies exceeding 35,000 reais (7,000) per month are subject to progressive tax rates ranging from 15% to 22.50%.
Coinbase, Binance, Bitso, and Crypto.com are international crypto exchanges that operate in the country, along with Mercado Bitcoin and Foxbit.
