In the latest move to close existing “loopholes” in the country’s tax system related to foreign-exchange transactions, Brazil is reportedly exploring the possibility of imposing taxes on cryptocurrency transactions used for international payments.
Cross-Border Crypto Transfers As Forex Operations?
According to two officials familiar with the discussions who disclosed the information to Reuters, the Finance Ministry is considering expanding its financial transaction tax (IOF) to include certain cross-border transfers involving crypto assets, such as stablecoins, which are classified as foreign-exchange operations.
Currently, crypto transactions are not subject to the IOF tax, although investors are required to pay income tax on capital gains that exceed a specific monthly exemption.
While the primary intention behind this proposed taxation appears to be closing a regulatory gap, it also has the potential to enhance public revenue at a time when Brazil is striving to meet its fiscal targets.
The country’s crypto market, especially its reliance on stablecoins, has seen significant growth in recent years. In the first half of 2025 alone, crypto transactions in Brazil amounted to 227 billion reais (approximately $42.8 billion), representing a 20% increase compared to the previous year.
Notably, stablecoins accounted for two-thirds of that volume, with USDT, issued by Tether, predominating. In contrast, Bitcoin (BTC) transactions made up only about 11% of the total.
The new regulatory framework established by the central bank is poised to support a tax change, as officials believe stablecoins serve primarily as a cost-effective means of maintaining dollar balances.
One source indicated that the upcoming regulations aim to prevent regulatory arbitrage between stablecoins and traditional foreign-exchange markets.
Brazil Estimates $30 Billion In Annual Revenue Losses
The central bank’s new guidelines will take effect in February 2026, treating any transaction involving the purchase, sale, or exchange of stablecoins as a foreign-exchange operation.
This classification will extend to international payments facilitated through virtual assets, as well as electronic transactions and transfers to and from self-custody wallets.
The government is reportedly reviewing the implications of these changes with caution, emphasizing that the new classifications do not automatically invoke tax obligations. Specific guidance from Brazil’s federal tax authority will dictate whether transactions will be taxed.
In a recent initiative, the tax service has expanded reporting requirements for crypto transactions to encompass foreign service providers operating in Brazil.
A Federal Police official noted that improved visibility of digital asset transactions subject to IOF taxation would facilitate the levying of other import taxes as well.
The official highlighted concerns that companies could misrepresent import values, stating, “If you import machinery or inputs, declare 20% officially, and send the other 80% via USDT without paying customs duties, IOF is the least of your problems.”
The government estimates that more than $30 billion in potential annual revenue from imports is being lost due to crypto transfers meant to evade taxation.
Featured image from DALL-E, chart from TradingView.com
