Brazil’s Receita Federal has reported a drastic increase in the use of stablecoins in the country, with Tether (USDT) being the most popular. According to the Internal Revenue Service surveys conducted since 2019, the cumulative trading volume of USDT in the same period was over 271 billion reais, almost double that of Bitcoin (151 billion reais). USD Coin (USDC) and BRZ, a stablecoin pegged to the Brazilian real, followed next in line.
Data from the Brazilian Tax Agency shows that, in 2022, Tether (USDT) had a trading volume growth that exceeded the sum of all other cryptocurrencies combined. This number has only increased in 2023, with 80% of the reported cryptocurrency turnover relating to USDT.
The surge in the use of cryptocurrencies in Brazil has prompted the Country’s Central Bank to introduce tighter regulations. This October, the Brazilian Congressional Commission proposed the indictment of Binance CEO Changpeng CZ Zhao and other local executives of the crypto exchange. This was due to fraud and other financial crimes, such as selling unregistered securities.
Last August, Agencia Brasil reported the official name of Brazil’s Central Bank Digital Currency (or CBDC): Drex. Drex stands for ‘Digital Real Electronic X’, to convey the idea of modernity and connectivity. Although there has been talk of its launch since last year, there currently seems to be no official announcement regarding its release.
The purpose of Drex is to make life easier for Brazilians, providing citizens and entrepreneurs with a safe and regulated environment for the creation of new businesses and more democratic access to the benefits of the digitalisation of the economy.