Bitcoin Has Stiff Competition In Brazil: A Stablecoin Leads With 80% Of Transactions
While Brazil sees higher acceptance of USDT, other Latin American nations like Argentina have bigger appetites for Maker’s DAI.
This insight into crypto preferences comes as the market booms in anticipation of the potential approval of a spot Bitcoin ETF.
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Brazil’s revenue service agency states that 80% of all cryptocurrency transactions in the country represent those done in stablecoin Tether (CRYPTO: USDT), as reported by CoinTelegraph based on government data.
Tax data in the country highlights that USDT and USDC are the most traded stablecoins in pairs with USD and BRZ.
As of mid-October, USDT transactions in Brazil stood at around $55 billion, almost double the volume of Bitcoin, which stood at $30 billion.
In the past 24-trading volume, Tether saw an expansion of 79% while BTC was up by 87%.
Data also reveals that 2022 witnessed a significant surge in the volume of USDT traded, as it crossed the sum of all the other cryptocurrencies traded in the same year.
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What Is The Role Of Government?
Brazil's crypto exchanges have been required to disclose all user transactions to the government since 2019. The government tax agency tracks the crypto-related activities of citizens using a sophisticated system that relies on artificial intelligence and network analysis. It is also able to track suspicious activity and trace the location of individuals trading cryptocurrencies.
Brazil is also seeking to investigate crypto investments held by its citizens overseas, as the local Congress passed legislation last week recognizing cryptocurrencies as “financial assets” for tax purposes in foreign investments.
Earnings around $10,000 will have a 15% tax rate from January 2023 while anything above that amount will be taxed at 22.5%.
While local players like Mercado Bitcoin and Foxbit operate in Brazil, global crypto exchanges such as Coinbase, Binance, Bitso and Crypto.com also have their presence.
Brazil's Largest Bank Promotes Crypto
In May 2022, Brazil’s largest digital bank Nubank announced that users will now be able to purchase and sell Bitcoin and Ether on its platform. The bank’s parent company Nu Holding also allocated almost 1% of its cash on the balance sheet to Bitcoin to indicate confidence in the crypto.
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Paxos' blockchain infrastructure will supply the crypto trading and custody service. Initially, Nubank enabled users to invest in crypto only through ETFs available through investment unit, NuInvest.
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