USDT Stablecoin Use Increases Rapidly In Brazil

JAKARTA - Brazil's Federal Tax Special Department, or Federal Receita, recently reported a significant increase in the use of stablecoins, particularly Tether (USDT).

According to regulatory reports, USDT's volume exceeds the combined trading volume of all other cryptocurrencies by 2022.

Stablecoins form about 10% of the global trading volume of the crypto industry and are usually more trusted to protect value (store of value) from the volatility of other crypto assets.

For years since its emergence, stablecoins have become a major asset for anyone involved in digital assets as they bridge the gap between fiat and cryptocurrencies. Stablecoins also offer stability levels that make them popular used for various financial transactions.

In Brazil, Federal Receita data shows that the most frequently traded stablecoins are USDT (Tether) and USDC (Circle), both stablecoins tied to US dollar value, along with BRZ, which is linked to real Brazil.

Since 2019, the Federal Receita has conducted a monthly assessment to keep up with the growth in stablecoin usage. Based on regulator research, stablecoins have exceeded the volume of Bitcoin transactions.

Based on partial data for 2023, 80% of reported cryptocurrency transactions related to USDT, make stablecoin the most-traded digital asset in the country over the past 10 months.

According to regulators, USDT's trading volume began to exceed Bitcoin's trading volume in 2022 after Terra LUNA's collapse. So investors prefer assets that are immune to extreme volatility, such as stablecoins.

USDT trading volume in Brazil has surpassed Brazil's 271 billion reals (approximately $54 billion or IDR 859 trillion). That means nearly double the volume of leading crypto trading, Bitcoin (BTC), which is trading around 151 billion Brazilian reals (approximately $30 billion or IDR 477 trillion) in the same period.

The Federal Receita said it had closely monitored the significant growth in USDT usage as it had a major impact on tax law governance and state regulation on digital assets.

According to regulators, there has been a shift from leading cryptocurrencies to stablecoins. Therefore, it requires the attention of the government and could potentially lead to additional legislation for the digital asset industry.