Brazil reports stablecoin boom, USDT trading volume exceeds all other digital assets combined

Brazil’s Receita Federal (special federal tax department) recently reported a significant increase in the use of stablecoins, especially Tether’s USDT. According to the regulator’s report, USDT’s trading volume in 2022 exceeded that of all other cryptocurrencies combined.

Stablecoins account for approximately 10% of global trading volume in the crypto industry, and are often more trusted as a safe haven when crypto market volatility is at its peak. In the years since their inception, stablecoins have become staple holdings for anyone involved in digital assets as they bridge the gap between fiat currencies and cryptocurrencies.

Stablecoins also offer a level of predictability, which makes them increasingly popular for various financial transactions.

USDT vs. Cryptocurrencies

In Brazil, Receita Federal data shows that the most frequently traded stablecoins are USDT (Tether) and USDC, both of which are pegged to the U.S. dollar, and BRZ, which is pegged to the Brazilian real.

Since 2019, Receita Federal has been conducting monthly reviews to track the growth of stablecoin usage.

According to research by regulators, stablecoin trading volume has surpassed Bitcoin.

According to partial data from 2023, 80% of cryptocurrency transactions are related to USDT, making it the most traded digital asset in the country over the past 10 months.

Bitcoin Lags

USDT trading volume will begin to surpass Bitcoin trading volume in 2022 after Terra LUNA’s high-profile drop led to investors rushing into assets such as stablecoins that are not subject to extreme volatility, according to regulators . USDT has become

USDT’s trading volume in Brazil exceeded 271 billion Brazilian reals (approximately $54 billion) during the observation period, almost double the trading volume of the flagship cryptocurrency Bitcoin (BTC), which traded in the same The trading volume for the period was slightly over 151 billion reais (approximately $30 billion) at that time.

In comparison, the global 24-hour trading volume of USDT and Bitcoin is $14.58 billion and $14.01 billion respectively.

While USDT’s average trading volume is higher, the lead never exceeds around 50%, nor does it exceed the trading volume of all digital assets combined.

Regulatory Issues

Receita Federal said it has been closely monitoring the significant growth in USDT usage as it could have a significant impact on the tax and regulatory environment for digital assets in the country.

Analysis of public data shows that the profile of cryptocurrency trading has changed significantly in recent years. The dominance of Bitcoin and other cryptocurrencies has been eclipsed by the growing popularity of stablecoins like Tether.

Regulators say this shift deserves government attention and could lead to additional legislation targeting the digital asset industry.

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