Brazil industry giants representing 850 companies decry stablecoin tax threat

Leading cryptocurrency and fintech industry groups in Brazil, representing over 850 companies, have voiced strong opposition to extending the financial transaction tax (IOF) to stablecoin operations. They argue that applying the IOF to stablecoins would violate both the Brazilian Constitution and the Virtual Assets Law, as stablecoins are not considered fiat currency. The groups emphasize that the Constitution defines the IOF as applying only to currency exchange transactions, and the 2022 Virtual Assets Law explicitly excludes virtual assets from being classified as fiat currency. They contend that any attempt to impose the tax through administrative means would be unlawful, requiring legislative approval. Brazil has become a significant crypto market, with approximately 25 million participants, and stablecoin usage has surged, driven by factors like hedging against real volatility and lower cross-border transaction costs. The industry warns that a misstep in policy could damage this rapidly growing sector, with stablecoin flows currently moving between $6 and $8 billion per month.

(Source：CoinDesk)