Recent insights from the Brazilian Revenue Service reveal a significant surge in Tether (USDT) transactions, eclipsing all other cryptocurrency activities in the nation since 2021. Tether has not only overshadowed other stablecoins but also outstripped the trading volume of Bitcoin (BTC) within the same timeframe.
Stablecoin’s Dominance in Digital Trade
In an eye-opening disclosure, the agency’s data points to USDT transactions constituting a staggering 80% of the total cryptocurrency dealings in Brazil for the early part of 2023. The dominance of USDT has been so pronounced that its trade volume has already overtaken the aggregate of all other cryptocurrencies transacted last year.
IMF’s Cautious Eye on Stablecoin Expansion
The burgeoning trend of stablecoin usage aligns with recent advisories from the International Monetary Fund (IMF), which cautioned that stablecoins bear the potential to usurp traditional currencies, significantly influencing the monetary policies of developing countries.
Technological Edge in Tracking Crypto
Brazil’s Receita Federal has been vigilant in monitoring stablecoin proliferation, leveraging advanced tools like artificial intelligence and network analysis. They’ve even introduced enhanced features that can decipher the intricate web of transactions between different crypto operators.
Coping with Inflation through Stablecoins
As Brazil grapples with soaring inflation rates and the Brazilian real’s depreciation, residents have markedly increased their stablecoin trades, tripling the volume since 2021. The Brazilian tax authority highlighted that from January to November 2021 alone, the populace had traded stablecoins worth $11.4 billion, nearly threefold the amount from the preceding year.
Inflation and Tax Incentives Fuel Shift
Inflation peaked at 10.06% in 2021, hitting its highest since 2015, propelling citizens towards the relative safety of stablecoins. Moreover, Brazilians sidestep the IOF tax—levied on financial transactions involving foreign currency exchange—when dealing with stablecoins, further encouraging their use over conventional currencies.
A Contrasting Scene Across Latin America
While USDT prevails in the Brazilian markets, other Latin American countries like Argentina are witnessing a different pattern, with Maker’s DAI becoming increasingly popular among local crypto traders.
