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Brazil’s Receita Federal, the Special Department of Federal Revenue, has reported a significant increase in the usage of stablecoins, with Tether’s USDT leading the way. According to the regulator, the trading volume of USDT has surpassed that of all other cryptocurrencies combined in 2022.

Stablecoins have gained popularity in the crypto industry, particularly during times of high volatility when they are seen as a safe haven. They provide a bridge between fiat currencies and digital assets, offering stability and predictability.

In Brazil, USDT and USDC, both pegged to the U.S. dollar, and BRZ, linked to the Brazilian real, are among the most frequently traded stablecoins. Since 2019, Receita Federal has been monitoring the growth of stablecoin usage on a monthly basis.

Based on the regulator’s research, stablecoins, led by USDT, have surpassed Bitcoin in transaction volume. In 2023, 80% of reported cryptocurrency transactions in Brazil were related to USDT, making it the most traded digital asset in the country over the past 10 months.

The surge in USDT trading volume can be attributed to investors seeking assets that are immune to extreme volatility, following the collapse of Terra LUNA. During the observed period, USDT’s trading volume in Brazil exceeded 271 billion Brazilian reais (approximately billion), while Bitcoin traded at a little over 151 billion reais (approximately billion).

While USDT has consistently had higher trading volumes than Bitcoin, it has never surpassed the combined trading volume of all digital assets globally. Receita Federal has expressed concerns about the significant growth of USDT usage and its potential ramifications for tax and regulation in the country.

The shift towards stablecoins in Brazil’s cryptocurrency transactions has caught the attention of the government, and additional legislation for the digital asset industry may be forthcoming.

Sources:
– Receita Federal report
– https://news.bitcoin.com/brazil-tether-usdt-overtakes-bitcoin-trading-volume/

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