The adoption of the popular stablecoin Tether (USDT) in Brazil has experienced a remarkable surge in 2023, now constituting a staggering 80% of all crypto transactions within the country.
According to data provided by Brazil’s tax agency that was first reported on by Cointelegraph, the total USDT transactions in Brazil for the year amounted to approximately $271 billion Brazilian reais (equivalent to roughly $55 billion USD) as of mid-October,
The amount is nearly double the volume of Bitcoin (BTC) transactions in the country, totaling $151 billion reais (about $30 billion USD).
USDT first surpassed Bitcoin in 2022
USDT has seen a consistent increase in popularity in Brazil since 2021.
Notably, they surpassed the volume of Bitcoin transactions for the first time in July 2022, marking a significant shift in the country’s crypto landscape.
With the crypto downturn in 2022, however, Brazil saw a reduction of close to 25% in crypto transactions, and by the end of the year the reported volume stood at only $154.4 billion reais (around $31 billion USD), Cointelegraph reported, citing government data.
Crypto held abroad now taxable
In addition to keeping track of domestic crypto transactions, Brazil’s tax agency is now also watching crypto investments held abroad by Brazilian citizens after the country’s parliament passed legislation recognizing crypto as “financial assets” for tax purposes, the report said.
Beginning in January 2024, earnings from overseas investments between 6,000 and 50,000 reais (roughly $10,000 to $100,000 USD) will be subject to a 15% tax rate.
For amounts exceeding this threshold, taxes will be imposed at a rate of 22.5%.
In Brazil, profits from crypto sales exceeding 35,000 reais (around $7,000 USD) per month are taxed at a rate ranging from 15% to 22.5%.
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