Brazil’s Federal Tax Administration (RFB), the agency responsible for administering federal taxes, revealed a change in the profile of Brazilian cryptocurrency investors. In a report published on Wednesday (25), the RFB highlights the popularization of stable coins.
Although Bitcoin was dominant until mid-2022, its position was lost to the stablecoin Tether (USDT). According to the latest data, USDT’s trading volume is already almost double that of BTC.
“Based on the analysis of public data, it is possible to observe a significant change in the profile of transactions involving cryptocurrencies in recent years”wrote the tax authorities. “Trading in Bitcoin and other cryptocurrencies has largely been overtaken by the movement of stablecoins like Tether.”
By pegging the US dollar while the support is largely backed by US government bonds, Tether has become an easy way to gain exposure to the US economy.
However, the Tax Authorities notice this “This change deserves attention as it could have significant implications for the tax and regulatory scenario for cryptocurrencies in the country.”
“Considering only partial data from 2023, 80% of the reported cryptocurrency movement is related to USDT.”
September data revealed the 20 cryptocurrencies most traded by Brazilians, leaving 3 stablecoins among the 4 with the highest volume in the period. With more than 4.1 million taxpayers in one month, declarations reached a record.
The federal tax authorities may be concerned about the popularity of stablecoins as a means of payment
Elsewhere, the IRS cites the World Economic Forum to warn that stablecoins could pose greater risks than volatile cryptocurrencies like Bitcoin. In other words, they could be a threat to Real because they are more accepted in the trade.
“In a recent article published on its blog, the International Monetary Fund (IMF) warned that stablecoins ‘could replace national currencies and impact the fiscal and monetary policies of countries, especially in developing economies’”wrote the Tax Authorities.
Therefore, in addition to the tax issue, the RFB might also monitor the use of Tether and other stablecoins as a means of payment in Brazil. Although there are no significant cases here, the practice has already become a controversial topic in countries like Indonesia, especially in tourist cities like Bali.
Federal Revenue Unveils Tools Used to Monitor the Cryptocurrency Market
Finally, the RFB reveals that it has a complete analytics system to monitor the cryptocurrency market and detect suspicious transactions. According to the agency, it is possible to monitor where transactions take place.
“For example, these systems make it possible to monitor where negotiations are taking place, as shown in the map below, including the locations of individuals buying and selling cryptocurrencies.”
According to the RFB, the agency already uses modern data processing techniques, artificial intelligence and complex network analysis. “This tool has just received new functionality designed to display relationships between operators, which should facilitate analysis when looking for tax irregularities”ends the text.
On social media, the IRS published a video with more details about the behavior of Brazilian cryptocurrency investors, as well as its analysis tools.
#Cryptoactives: Federal Revenue Detects Staggering Growth in Stablecoin Movement 🪙📈📊 pic.twitter.com/Rlj2jxsEOM
— Federal Revenue (@ReceitaFederal) October 25, 2023
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
