Brazil’s USDT Adoption Soars, Dominates 80% of Crypto Transactions

  • Stablecoin Tether (USDT) takes center stage in Brazil’s cryptocurrency market, hitting $271 billion in transactions.
  • USDT is claiming an impressive 80% of all crypto transactions.

Brazil has witnessed an extraordinary surge in the adoption of the stablecoin Tether (USDT), which now comprises a staggering 80% of all cryptocurrency transactions in the country in 2023. This surprising shift in the country’s crypto landscape is backed by data from Brazil’s revenue service agency. Let’s take a deeper look at how stablecoins are outperforming other cryptos in Brazil.

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USDT Overtakes Bitcoin in Brazil

As of mid-October this year, USDT transactions in Brazil have reached a whopping $271 billion Brazilian reais (approximately $55 billion). This figure nearly doubles the volume of Bitcoin transactions, which stands at $151 billion reais (around $30 billion). These statistics are a testament to the growing influence of stablecoins in the Brazilian crypto ecosystem.

Understanding Stablecoins

Stablecoins like USDT are a unique category of cryptocurrencies designed to maintain a stable value. They are often pegged to the value of fiat currencies, such as the U.S. dollar and the Brazilian real. This stability makes them an attractive option for both traders and investors, contributing to their surging popularity.

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A Steady Rise Since 2021

The ascent of USDT in Brazil’s crypto landscape has been steadily climbing since 2021. However, it wasn’t until July 2022 that it surpassed the volume of Bitcoin transactions. This milestone was reached during a tumultuous period in the crypto industry when giants like Three Arrows Capital and Voyager Capital faced collapse.

Crypto Winter’s Impact

The impact of the crypto winter in 2022 was undeniable. It led to a nearly 25% reduction in the volume of crypto transactions in Brazil, bringing the total down to $154.4 billion reais, which translates to roughly $31 billion. This setback was acknowledged and reported by the Brazilian government, emphasizing the challenges and fluctuations faced by the crypto market.

Government’s Vigilant Oversight

Brazil’s tax agency has maintained a vigilant watch over crypto-related activities within the country. They employ a sophisticated system that harnesses artificial intelligence and network analysis to track the actions of citizens involved in crypto transactions. This system not only detects suspicious activities but also traces the location of individuals trading cryptocurrencies.

Also Read: The Top 10 Best Crypto Trading Bots in 2023

International Reach and Taxation

Brazil’s government has extended its reach to crypto investments held by its citizens overseas. A significant step was taken on October 25 when the local Congress passed legislation recognizing cryptocurrencies as financial assets for tax purposes in foreign investments. Earnings between 6,000 and 50,000 reais (approximately $10,000) will be subject to a 15% tax rate beginning in January 2024. Beyond this threshold, taxes will escalate to 22.5%.

Moreover, since 2019, crypto exchanges operating in Brazil have been obligated to disclose all user transactions to the government. Capital gains resulting from crypto sales exceeding 35,000 reais (around $7,000) per month are subject to a progressive tax bracket ranging from 15% to 22.50%. This shows the government’s commitment to ensuring transparency.

Diverse Crypto Ecosystem

Brazil’s crypto landscape is home to a mix of global and local players. Prominent global exchanges like Coinbase, Binance, Bitso, and operate within the country. They work alongside local platforms such as Mercado Bitcoin and Foxbit, fostering a diverse ecosystem that caters to the growing interest of Brazilians in digital currencies.

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