Tether (USDT) has seen a significant increase in its trading volume in Brazil, representing 80% of all Brazilian crypto transactions by 2023, according to the Receita Federal. The surge began in July 2020, and by July 2022, USDT had outpaced Bitcoin, reaching over R$271 billion ($49 billion) by mid-October 2023. This figure is nearly double Bitcoin's trading volume of R$151 billion ($27 billion).
The growth of USDT's trading volume has surpassed the combined volumes of key cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Brazilian real stablecoin (BRZ), USD Coin (USDC), and XRP. Despite a downturn of 24.3% in overall crypto transactions during the industry turmoil in 2022, USDT maintained its growth trajectory. Its stability, derived from being pegged to the US dollar, has enhanced its appeal compared to more volatile cryptos like Bitcoin.
Brazil's burgeoning interest in cryptocurrency is evident as Chainalysis ranks it ninth globally in digital asset adoption. As one of Latin America's largest crypto markets, the rise of USDT could further bolster Brazil's position in the digital assets and web3 space.
The increase in stablecoin trading tripled since 2021 amid a 10.06% inflation rate - the highest since 2015 - and the steady devaluation of the Brazilian real. Trading hit $11.4 billion between January and November alone. Brazilians are exempt from the IOF tax when acquiring stablecoins, unlike foreign currencies, which has fueled this trend further.
While other Latin American nations like Argentina favor Maker's DAI, USDT reigns supreme in Brazil. However, the International Monetary Fund (IMF) has issued warnings that stablecoins could potentially replace official currencies and significantly impact monetary policies in developing economies.
The Receita Federal do Brasil uses artificial intelligence and network analysis with newly added functionality to its tracking tool to represent relationships between operators and monitor these developments in the crypto market.
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