The tax authority in Brazil has reported a significant surge in the country’s trading volume of Tether (USDT) since 2021. Tether, among its stablecoin peers, has gained notable traction, even exceeding Bitcoin (BTC) in trading volume over the same timeframe.
The report noted, “Tether, among all stablecoins, has shown remarkable prominence. The accumulated trading volume for the period scrutinized by tax officials reached over R$271 billion, nearly twice the volume of Bitcoin, which stood at over R$151 billion.”
Data sourced from Brazil’s revenue service reveals that 80% of the country’s cryptocurrency transactions in 2023 have involved USDT, establishing it as the predominant digital asset in Brazil for the year.
The report unveiled that, based on the partial data for 2023, a staggering 80% of all recorded cryptocurrency activity in Brazil is tied to USDT. Even more striking is the fact that the trading volume of this particular stablecoin has surpassed the combined volume of all other cryptocurrencies traded in the previous year.
This pattern aligns with a recent cautionary note from the International Monetary Fund (IMF). The IMF has pointed out that stablecoins have the potential to usurp official currencies, which could profoundly disrupt nations’ monetary policies. This effect is particularly pronounced in emerging economies.
Brazil’s tax authority, the Receita Federal do Brasil, has been keenly observing the surge in stablecoin activity. They’ve employed advanced methods, such as AI and network analysis, to keep tabs on the situation. Furthermore, their monitoring tool has been updated with new features aimed at illustrating the connections between different operators.
Brazil’s Stablecoin Pivot
Due to surging inflation and the continuous devaluation of the Brazilian real, the trading volume of stablecoins by Brazilians has tripled since 2021.
In a prior disclosure, the tax authority stated that from January to November 2021, the local populace traded stablecoins worth $11.4 billion. This volume was almost three times the amount traded in 2020.
One of the significant drivers behind this surge in stablecoin trading is Brazil’s escalating inflation. The country recorded an inflation rate of 10.06% in 2021, marking the highest level witnessed since 2015.
Additionally, Brazilians face the IOF (Tax on Financial Operations in Portuguese) when purchasing foreign currency. This tax does not extend to stablecoin transactions, making it a more appealing option.
The dominance of USDT in Brazil stands in stark contrast to its neighboring countries, such as Argentina. In Argentina, the stablecoin DAI, from Maker, has gained more traction.
