Brazil Proposes Stablecoin Tax to Plug $30B Gap, Align with Global Standards

Brazil Considers Taxing International Crypto Payments to Align With Global Standards and Plug Revenue Gaps

Brazil is advancing plans to tax cross-border cryptocurrency transactions, a move aimed at aligning its regulatory framework with international norms and addressing significant revenue losses from unregulated digital asset flows. The government is reportedly evaluating an expansion of the Imposto sobre Operações Financeiras (IOF), a financial transaction tax, to include stablecoin transfers and other crypto-based international payments. This initiative, which would take effect under new central bank rules starting February 2025, seeks to close regulatory loopholes and generate additional public revenue amid Brazil's rapidly growing crypto market.

The proposed tax would reclassify stablecoin transactions-such as those involving Tether's USDT-as foreign exchange (forex) operations, subjecting them to the same oversight as traditional currency transfers. This shift reflects the central bank's recent regulatory update, which defines stablecoin purchases, sales, and exchanges as forex activities. With stablecoins accounting for nearly two-thirds of Brazil's crypto transaction volume in the first half of 2025, the government estimates that unregulated transfers could cost it over $30 billion annually in lost tax revenue and customs fees.

The move aligns Brazil with the Organisation for Economic Co-operation and Development's (OECD) Crypto-Asset Reporting Framework (CARF), a global standard for sharing tax information on digital assets. On November 14, Brazil's Federal Revenue Service announced updated reporting rules to comply with CARF, enabling access to citizens' overseas crypto holdings through an international data-sharing network. This mirrors similar efforts by the U.S., European Union, and United Arab Emirates, underscoring a coordinated global push to combat crypto tax evasion.

Regulators have expressed concerns about stablecoins being used for informal currency exchange and money laundering. A Federal Police official noted that importers sometimes understate goods' value and transfer the remaining funds via stablecoins to avoid customs duties, a practice costing the government billions annually. The new tax rules, combined with stricter anti-money laundering (AML) measures for crypto exchanges, aim to curb such activities while integrating digital assets into the formal financial system according to finance analysts.

Political tensions have emerged as lawmakers debate the proposal. A bill introduced by Eros Biondini seeks to exempt long-term crypto investors from capital gains taxes, arguing that current rates are excessively high. However, the Finance Ministry has yet to issue an official statement, citing ongoing confidential discussions. Analysts note that while the tax could reduce stablecoins' appeal for remittances, it may also provide critical fiscal resources as Brazil faces budgetary pressures according to market experts.

The central bank's broader regulatory overhaul-including mandatory licensing for exchanges and expanded consumer protections-complements the proposed tax. These measures reflect Brazil's strategy to assert control over its crypto market, which saw $42.8 billion in transactions during the first half of 2025, a 20% year-over-year increase.

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