Brazil Moves to Close Stablecoin Loophole in Effort to Recover $30B in Taxes

Brazilian regulators are weighing the possibility of applying the country's financial transaction tax (IOF) to international stablecoin transfers, an initiative designed to address regulatory gaps and increase government revenue as crypto usage surges. The plan,

, is part of a comprehensive regulatory reform led by the Central Bank of Brazil, which earlier this year designated stablecoins as foreign-exchange (FX) assets. According to the updated regulations, , buying, selling, and exchanging stablecoins will be regulated as standard FX operations, bringing them under the same scrutiny as traditional currency exchanges.

This regulatory change comes as stablecoins have become the dominant force in Brazil’s digital asset sector.

that crypto transactions totaled 227 billion reais ($42.8 billion) in the first six months of 2025, marking a 20% rise from the same period in 2024. Stablecoins, particularly , the dollar-pegged token issued by , made up two-thirds of this activity, while represented only 11%. that stablecoins are increasingly being used for payments instead of investments, raising concerns about money laundering and tax evasion due to insufficient regulation.

The IOF expansion proposal aims to address a significant loss in tax revenue.

suggest that Brazil forfeits more than $30 billion each year in customs and tax revenue because of imports paid with stablecoins, where goods are under-reported and the rest of the payment is sent through unofficial channels. "If you import equipment or materials, declare only 20% officially, and transfer the other 80% using USDT without paying duties, IOF is the least of your worries," a source explained to . While the Finance Ministry has not commented directly, it has stressed the importance of treating crypto transactions like traditional FX to stop regulatory arbitrage .

Brazil’s regulatory efforts also reflect its commitment to international standards. The country recently

to align with the OECD’s Crypto-Asset Reporting Framework (CARF), enabling the exchange of information about offshore crypto assets. This mirrors similar anti-tax evasion initiatives in the U.S., EU, and UAE. Additionally, Brazil’s central bank has for crypto firms, mandating capital reserves of at least $7 million and stronger anti-money laundering (AML) measures.

Reactions in the market are divided. While the tax could discourage the use of stablecoins for remittances and imports, it could also provide much-needed funds for a government facing budget constraints.

under the new 17.5% flat tax on crypto profits, introduced in June 2025, which removed previous exemptions for monthly gains under R$35,000 ($6,300). Meanwhile, industry representatives argue that the new capital requirements favor established players like Nubank and XP Investimentos, potentially limiting competition.

Brazil’s digital asset sector,

and ranked fifth worldwide for adoption, faces a pivotal moment. The government’s actions mark a significant move toward bringing cryptocurrencies into the mainstream financial system, seeking a balance between innovation and fiscal responsibility. As the Finance Ministry finalizes the details of the tax, market participants are watching to see how the IOF will be applied to stablecoin transactions—and whether Brazil’s crypto boom will continue or slow down.