Brazil weighs IOF tax on cross-border crypto payments as stablecoin use soars
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Brazil is thinking about extending its IOF tax on financial transactions to cryptocurrencies for international payments, two officials familiar with the ongoing discussions told Reuters.
Such a move would plug a hole in the recent forex-type framework on stablecoin and virtual-asset operations, applying to many areas promulgated by the central bank.
Crypto operations are already subject to income tax (i.e., income tax) above a specific amount of monthly gains, even though they do not already pay IOF.
The suggestion is presently being considered by the Finance Ministry, which also declined to comment on the talks.
According to one of the officials involved in the discussions, the ministry is considering whether cross-border payments using virtual assets would be subject to the IOF regime following the central bank’s official statement that stablecoin activities are considered foreign exchange.
However, the new definitions have nothing automatic regarding tax implications, said the source, who added that the authority’s implementation will depend on more definitions by Brazil’s federal tax authority.
Potential revenue lift amid tight fiscal goals
The officials stressed that the main purpose here is plugging a regulatory loophole, rather than generating tax revenue.
Nevertheless, at this kind of moment, the measure can offer a timely support to public finances, as the government works on ambitious fiscal objectives to ease the pressure on the budget.
The rapid expansion of Brazil’s crypto market in recent years has been fueled by locals adopting stablecoins, especially USDT, as an easy and cheap way to maintain greenback-linked balances.
Total crypto transactions in the first half of 2025 came in at 227 billion reais ($42.8 billion), a rise of 20% against the same period a year prior, according to data from the federal tax authority.
Of that volume, roughly two-thirds were due to stablecoin trading (USDT appeared to be the leading coin in this regard), while bitcoin made up a mere 11%.
According to a Federal Police source, the imposition of IOF taxation on FX operations related to crypto could enhance tracing of transactions, potentially leading to other tax evasion.
So if imaginary here has you importing a machine or inputs, declaring only 20% of the proper value officially, and sending the other 80% under the table via USDT (without paying customs taxes at all), the IOF is the least of your problems the official said, estimating that traditional imports financed via crypto to avoid this type of taxation represent a more than $30 billion annual loss to nobility.
Central Bank framework sets stage for taxation
Any buy, trade, or exchange of stablecoins is regarded as a foreign-exchange transaction under the central bank’s new regulations, which will go into force in February.
The settlement of card obligations, electronic payment methods, and transfers between self-custody wallets and service providers are all covered by them, as are foreign payments or transfers performed using virtual assets.
Regulators now have a better foundation to deal with what officials refer to as regulatory arbitrage, thanks to the classification.
The framework is intended to “ensure that the use of stablecoins does not create regulatory arbitrage vis-à-vis the traditional foreign-exchange market,” according to a government source.
In the midst of a disjointed legal framework, Brazilian authorities have repeatedly cautioned that stablecoins are being used mostly for payments rather than investments, opening up a new avenue for money laundering.
The central bank does not automatically impose taxes, even when its criteria increase scrutiny.
Brazil’s federal tax department, which expanded reporting rules for cryptocurrency transactions to include foreign service providers operating in the nation on Monday, has jurisdiction.
The goal of the extension is to guarantee that regulators have access to the information they need to enforce current regulations and take into account future duties like IOF taxation.
Next steps under review
The Finance Ministry is examining how the IOF may be applied to cross-border crypto-based transactions without interfering with lawful financial activities or discouraging innovation.
The examination, according to one official, is “careful,” emphasising that the government wants to prevent unforeseen implications for the rapidly expanding virtual-asset industry.
The conclusion of the debate might change how cryptocurrency is used in the biggest economy in Latin America and influence how Brazil fills one of the most significant holes in its legislative framework, given that stablecoin use is still growing and economic pressures are increasing.
The post Brazil weighs IOF tax on cross-border crypto payments as stablecoin use soars appeared first on Invezz
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Brazil weighs IOF tax on cross-border crypto payments as stablecoin use soars
Share:
Brazil is thinking about extending its IOF tax on financial transactions to cryptocurrencies for international payments, two officials familiar with the ongoing discussions told Reuters.
Such a move would plug a hole in the recent forex-type framework on stablecoin and virtual-asset operations, applying to many areas promulgated by the central bank.
Crypto operations are already subject to income tax (i.e., income tax) above a specific amount of monthly gains, even though they do not already pay IOF.
The suggestion is presently being considered by the Finance Ministry, which also declined to comment on the talks.
According to one of the officials involved in the discussions, the ministry is considering whether cross-border payments using virtual assets would be subject to the IOF regime following the central bank’s official statement that stablecoin activities are considered foreign exchange.
However, the new definitions have nothing automatic regarding tax implications, said the source, who added that the authority’s implementation will depend on more definitions by Brazil’s federal tax authority.
Potential revenue lift amid tight fiscal goals
The officials stressed that the main purpose here is plugging a regulatory loophole, rather than generating tax revenue.
Nevertheless, at this kind of moment, the measure can offer a timely support to public finances, as the government works on ambitious fiscal objectives to ease the pressure on the budget.
The rapid expansion of Brazil’s crypto market in recent years has been fueled by locals adopting stablecoins, especially USDT, as an easy and cheap way to maintain greenback-linked balances.
Total crypto transactions in the first half of 2025 came in at 227 billion reais ($42.8 billion), a rise of 20% against the same period a year prior, according to data from the federal tax authority.
Of that volume, roughly two-thirds were due to stablecoin trading (USDT appeared to be the leading coin in this regard), while bitcoin made up a mere 11%.
According to a Federal Police source, the imposition of IOF taxation on FX operations related to crypto could enhance tracing of transactions, potentially leading to other tax evasion.
So if imaginary here has you importing a machine or inputs, declaring only 20% of the proper value officially, and sending the other 80% under the table via USDT (without paying customs taxes at all), the IOF is the least of your problems the official said, estimating that traditional imports financed via crypto to avoid this type of taxation represent a more than $30 billion annual loss to nobility.
Central Bank framework sets stage for taxation
Any buy, trade, or exchange of stablecoins is regarded as a foreign-exchange transaction under the central bank’s new regulations, which will go into force in February.
The settlement of card obligations, electronic payment methods, and transfers between self-custody wallets and service providers are all covered by them, as are foreign payments or transfers performed using virtual assets.
Regulators now have a better foundation to deal with what officials refer to as regulatory arbitrage, thanks to the classification.
The framework is intended to “ensure that the use of stablecoins does not create regulatory arbitrage vis-à-vis the traditional foreign-exchange market,” according to a government source.
In the midst of a disjointed legal framework, Brazilian authorities have repeatedly cautioned that stablecoins are being used mostly for payments rather than investments, opening up a new avenue for money laundering.
The central bank does not automatically impose taxes, even when its criteria increase scrutiny.
Brazil’s federal tax department, which expanded reporting rules for cryptocurrency transactions to include foreign service providers operating in the nation on Monday, has jurisdiction.
The goal of the extension is to guarantee that regulators have access to the information they need to enforce current regulations and take into account future duties like IOF taxation.
Next steps under review
The Finance Ministry is examining how the IOF may be applied to cross-border crypto-based transactions without interfering with lawful financial activities or discouraging innovation.
The examination, according to one official, is “careful,” emphasising that the government wants to prevent unforeseen implications for the rapidly expanding virtual-asset industry.
The conclusion of the debate might change how cryptocurrency is used in the biggest economy in Latin America and influence how Brazil fills one of the most significant holes in its legislative framework, given that stablecoin use is still growing and economic pressures are increasing.
The post Brazil weighs IOF tax on cross-border crypto payments as stablecoin use soars appeared first on Invezz
In This News
Share:
In This News
Share:
Read More
Trillions in stablecoin flows but almost zero privacy as Aleo’s latest report exposes massive crypto paradox