• Brazil’s crypto industry opposes the proposed IOF tax on stablecoins, citing legal conflicts with existing crypto laws.
• Experts warn the tax could slow growth in Brazil’s expanding crypto market.

Associations of over 850 companies, including ABcripto, ABFintechs, Abracam, ABToken, and Zetta, have expressed interest in the decision to impose the Imposto sobre Operacoes Financeiras (IOF) on stablecoins. According to them, the tax contradicts Brazil Constitution and the Virtual Assets Law (Law No. 14,478/2022), which states that virtual assets are not considered national or foreign currency.

Legal Contradictions Highlighted by Experts

Antonio Vale, coordinator at the Free Market Institute, emphasized the legal contradiction:

“The decree that defines the IOF tax on foreign exchange states that the taxable event is the exchange of national or foreign currency. However, Law 14,478/2022 explicitly states that virtual assets are not national or foreign currencies.”

The proposed tax could affect Brazil’s fast-growing crypto market, which has roughly 25 million participants. Stablecoins such as Tether’s USDT and Circle’s USDC dominate activity, while BRL-pegged stablecoins have reached $906 million in the first half of 2025.

The Parliamentary Front of the Free Market is creating a legislative decree to prevent the tax in case a government decree is passed, stating that the executive branch is exceeding its authority. Julia Rosin, president of Abcripto, has threatened to go to court in case the government implements the action.

Distinguishing Oversight from Tax Policy

The industry further points out that central bank monitoring rules are not to be mixed with tax policy and that just oversight is not a reason to extend the IOF to stablecoins.

The crypto industry in Brazil is still growing with the growth of fintech innovation, digital payments, and blockchain infrastructure, and the direction of policymakers in taxation can largely influence the development of the industry and its competitiveness on the global level.

With stablecoin usage surging, Brazil is emerging as one of Latin America’s largest crypto markets. Experts warn that ill-designed tax policies may slow innovation and reduce the economic feasibility of local businesses.

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