Brazil Weighs Taxing Cross-Border Crypto Payments

Brazil’s government is weighing plans to tax the use of cryptocurrencies in international payments, targeting a fast-growing channel for moving money across borders, according to a Reuters report.

Two officials with direct knowledge of the talks told Reuters the Finance Ministry is studying how to extend its financial transaction tax (IOF) to certain cross-border transfers using virtual assets and stablecoins. The discussions follow a move by Brazil’s central bank this month to classify those operations as foreign-exchange transactions.

Both officials emphasized that the proposal is aimed at closing a regulatory loophole that allows crypto-based transfers to bypass a tax applied to traditional FX deals, the news agency said. But they acknowledged the measure could also bolster public revenues at a moment when Brazil’s fiscal outlook is under heavy scrutiny.

Brazil’s crypto market has expanded sharply in recent years, driven above all by dollar-linked stablecoins, according to federal tax authority data cited by Reuters.

In the first half of 2025, crypto transactions reached 227 billion reais ($42.8 billion), up 20% from a year earlier. Roughly two-thirds of that volume involved USDT, the stablecoin issued by Tether and backed by U.S. dollar assets. Bitcoin, by contrast, accounted for only about 11% of activity.

One of the sources told Reuters the central bank’s new regulatory framework was crafted on the understanding that stablecoins in Brazil are used mainly as a low-cost way to hold dollar balances, rather than as speculative assets.

Treating those flows as FX operations, the source said, is meant to prevent users from exploiting “regulatory arbitrage” between the crypto and traditional foreign-exchange markets, according to the report.

Brazilian officials have repeatedly warned that stablecoins are being used primarily for payments, not investment, and can provide a new channel for money laundering when left outside clear rules, Reutersreported.