In 2023, the use of USDT in Brazil increases, accounting for 80% of all cryptocurrency transactions.

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In 2023, Brazil has witnessed a remarkable upswing in the adoption of the USDT stablecoin, which now constitutes a staggering 80% of all cryptocurrency transactions within the nation. This surge is substantiated by data from Brazil’s revenue service agency.

Notably, USDT, also known as Stablecoin Tether, is valued at $1.00. It has experienced a substantial surge in adoption within Brazil, where it accounts for a remarkable 80% of all cryptocurrency transactions, as per data from Brazil’s revenue service agency. As of mid-October this year, USDT transactions in Brazil have surpassed $271 billion Brazilian reais (approximately $55 billion). This figure is almost double the volume of Bitcoin (BTC) transactions in the country, which amounted to $34,498 and $151 billion reais (around $30 billion).

Stablecoins like USDT are a class of cryptocurrencies engineered to maintain a consistent value. They are frequently tethered to the worth of fiat currencies, such as the U.S. dollar and the Brazilian real.

The ascendancy of USDT transactions in Brazil dates back to 2021 and culminated in a significant milestone in July 2022 when it eclipsed the volume of Bitcoin transactions. This shift occurred amid the tumultuous period in the cryptocurrency industry, marked by the downfall of prominent crypto lenders, Three Arrows Capital and Voyager Capital. The crypto industry’s meteoric rise was followed by a crypto winter that trimmed the volume of crypto transactions in Brazil by nearly 25% in 2022, settling at $154.4 billion reais, equivalent to approximately $31 billion, as reported by the government.

The Brazilian tax agency employs a sophisticated system reliant on artificial intelligence and network analysis to monitor the cryptocurrency-related activities of its citizens. This system possesses the capability to identify suspicious transactions and track the geographical origins of individuals engaged in cryptocurrency trading.

Moreover, the revenue agency has set its sights on crypto investments held by Brazilian citizens abroad. In a recent development, the local Congress passed legislation on October 25th, recognizing cryptocurrencies as “financial assets” for tax purposes in foreign investments. This new regulation imposes a 15% tax on earnings between 6,000 and 50,000 reais (around $10,000) starting in January 2024. For amounts exceeding this threshold, the tax rate escalates to 22.5%.

Since 2019, crypto exchanges operating in Brazil are mandated to divulge all user transactions to the government. Capital gains from crypto sales that exceed 35,000 reais (approximately $7,000) per month are subject to a progressive tax structure ranging from 15% to 22.5%.

Brazil hosts a diverse range of global crypto exchanges, including Coinbase, Binance, Bitso, and Crypto.com, alongside homegrown players such as Mercado Bitcoin and Foxbit.