Brazil Moves to Tax Crypto for Cross-Border Payments With New IOF Rule
Brazil is moving to apply its Financial Transactions Tax (IOF) to cross-border cryptocurrency payments, reported, citing sources familiar with the proposal.
The government plans to extend the tax to and other crypto payments, treating them similarly to traditional foreign-platform transactions. Officials argue this will close a loophole that has allowed importers and other entities to bypass FX rules, potentially costing the country billions in lost revenue.
Sources told Reuters that Brazil may be losing more than $30 billion annually due to unregulated crypto flows used for cross-border payments and import-related transactions.
The Finance Ministry is reviewing the specifics, including which cryptocurrencies and transactions will be subject to the IOF and how the tax will be applied to both domestic and foreign platforms. Policymakers view the move as part of a broader fiscal strategy to increase transparency, curb illicit activity, and bolster government revenue.
Central Bank Tightens Crypto Oversight
The tax proposal aligns with a wider regulatory push by Brazil’s Central Bank, which has classified stablecoins and certain cross-border transfers as foreign-platform operations effective February 2026.
This framework requires crypto firms to obtain licenses, implement strong governance and security standards, and comply with reporting obligations. Foreign providers serving Brazilian users will also face stricter disclosure requirements, reflecting regulators’ goal of curbing illicit flows and strengthening oversight across the sector.
The adjustments aim to integrate into the formal financial system, while giving authorities the ability to monitor transactions more closely. Analysts say these rules will likely increase compliance costs for platforms and fintechs, but will also reduce regulatory arbitrage and enhance consumer protection.
Brazil Accelerates Its Crypto Regulatory Overhaul
Crypto regulation has been moving at a breakneck pace in Brazil, with lawmakers complementing the Central Bank’s measures with legislation targeting criminal use of digital assets.
The would allow authorities to liquidate cryptocurrencies seized in criminal investigations prior to trial. Treating crypto like cash or securities, the law aims to rapidly disrupt criminal networks that rely on digital assets for laundering and storing illicit funds.
Together, the regulatory and legislative efforts signal Brazil’s intent to assert tighter control over both the economic and criminal dimensions of crypto. By combining fiscal, supervisory, and anti-crime measures, the government is positioning itself to shape the future of digital assets in the country while preventing abuse and ensuring that cryptocurrencies contribute to the formal economy.
