Brazil tightens control over cryptocurrency transactions

Key point:

• Brazil has tightened reporting rules for cryptocurrency transactions and required both local and foreign exchanges to submit data on Brazilian users.
• DeFi users must now report transactions exceeding $6 560 per month.

Brazil’s Federal Revenue Service (Receita Federal) has tightened reporting rules for cryptocurrency transactions. Both local and foreign exchanges are now required to submit data on Brazilian users to the tax authorities. In addition, users of DeFi platforms must report all transactions exceeding 33 400 reais (approximately $6 560) per month. This applies to staking, airdrops, and any other transactions involving digital assets.

Andrea Costa Chaves, a representative of the tax service, said that the new rules are in line with standards in other countries. She also emphasized that by 2027, the agency will be able to easily exchange information with companies around the world that comply with the law. According to her, the main goal is to combat tax evasion, not to collect unnecessary data.

What this means for cryptocurrency users

The new requirements make it more difficult to hide income from cryptocurrency transactions. Since some exchanges will find it harder to comply with the updated rules, some users may try to switch to DeFi platforms, which are more difficult to control. However, the tax authorities are already looking for ways to track activity in DeFi, and this is becoming a serious challenge for regulators.

Market participants believe that attempting to force foreign exchanges to comply with Brazilian rules could create serious legal uncertainty.

The future of cryptocurrencies in Brazil

Further regulation remains unclear. Proposals for new laws that could affect stablecoins and other digital assets have already been put forward. If these initiatives are adopted, they could significantly change the use of cryptocurrencies in Latin America’s largest economy. Such changes could affect both market growth and the investment habits of the population.

Earlier, the Central Bank of Brazil approved new rules for the cryptocurrency industry, officially including digital platforms in the country’s financial system.