In a joint statement to CoinDesk, Brazilian industry associations said applying the IOF (Brazil financial operations tax) to stablecoins would conflict with Brazil’s Constitution and the 2022 Virtual Assets Law.
Brazil’s main cryptocurrency and fintech industry groups have opposed proposals to apply the IOF (Brazil financial operations tax) to stablecoin transactions, arguing the move would be illegal under Brazil’s Constitution and Law No. 14,478, the country’s 2022 Virtual Assets Law. In a joint statement shared with CoinDesk, ABcripto, ABFintechs, Abracam, ABToken and Zetta said the tax is constitutionally limited to currency exchange settlements involving national or foreign fiat money, while stablecoins are legally classified as virtual assets rather than fiat currency. The associations, which represent more than 850 companies, said any attempt to expand the tax through decree or administrative rule would unlawfully create or broaden a taxable event without legislative approval. The groups also warned that using central bank monitoring of digital asset transactions as a basis for taxation would be inappropriate and could undermine innovation in one of the world’s largest crypto markets. The report says about 25 million people in Brazil participate in the digital asset ecosystem. According to an auditor at Receita Federal (Brazil tax authority), the country’s crypto market processes between $6 billion and $8 billion per month, with roughly 90% tied to stablecoin flows. Dollar-pegged tokens such as Tether’s USDT and Circle’s USDC are widely used to hedge volatility in the Brazilian real, reduce cross-border transfer costs and support trading liquidity, while BRL-pegged stablecoins are also gaining traction.