Brazil’s Tether (USDT) trading volume eclipsed the combined trading volume of all other cryptocurrencies in 2022, as disclosed by the Receita Federal, the country’s Special Department of Federal Revenue.
Rising Stablecoin Dominance in Brazil
The Receita Federal, Brazil’s Special Department of Federal Revenue, has highlighted an accelerated surge in stablecoin adoption, with Tether (USDT) leading the pack. The report reveals that in 2022, USDT’s trading volume outstripped that of all other cryptocurrencies combined.
Stablecoins have progressively solidified their position in the digital asset landscape, seamlessly connecting the world of fiat currencies with cryptocurrencies. Their inherent stability, derived from being pegged to traditional currencies, makes them an appealing choice for a wide range of financial operations.
Brazil’s cryptocurrency enthusiasts seem to have a clear preference when it comes to stablecoins. Data from Receita Federal points towards the dominance of USDT and USDC, both tied to the U.S. dollar. Another notable mention is BRZ, which is pegged to the Brazilian real.
Tracking Stablecoin Growth
The Receita Federal’s commitment to understanding the evolving crypto landscape is evident from its monthly evaluations initiated in 2019. These studies indicate that stablecoins, in recent times, have even surpassed Bitcoin in terms of transaction volume.
Preliminary figures for 2023 suggest a continued trend, with USDT transactions constituting a whopping 80% of all reported cryptocurrency transactions in Brazil over the past year.
USDT Emerges as the Preferred Stablecoin
The upheaval caused by the prominent downfall of Terra LUNA in 2022 triggered a massive shift in investor sentiment, pushing them towards more stable assets. USDT, a stablecoin, emerged as the primary refuge from the extreme volatility rocking the crypto markets.
During this tumultuous phase, trading volumes of USDT in Brazil soared to a staggering 271 billion Brazilian reais (about $54 billion), outpacing the trading volume of the pioneering cryptocurrency, Bitcoin, which registered a little over 151 billion reais (around $30 billion) in the same period.
On the global front, a neck-to-neck contest was observed between USDT and Bitcoin. The 24-hour trading volumes for USDT were slightly ahead at $14.58 billion, with Bitcoin trailing closely at $14.01 billion.
Although USDT’s lead in trading volume is evident, it’s crucial to note that the margin has never exceeded roughly 50%. Moreover, while USDT’s prominence is undeniable, its trading volume has yet to surpass the combined trading volume of all other digital assets in the crypto sphere.
Shift in Cryptocurrency Landscape Spurs Regulatory Attention
The Receita Federal has expressed growing concerns over the exponential rise in USDT transactions, emphasizing its potential ramifications on Brazil’s tax structure and the broader regulatory framework for digital assets. Scrutinizing publicly available data uncovers a transformative trend in the crypto sector.
The once-unrivalled dominance of Bitcoin and its crypto peers is now overshadowed by the burgeoning traction stablecoins, particularly Tether, have gained.
The regulator asserts that this evolving trend merits heightened governmental oversight. The mounting influence and acceptance of stablecoins could very well catalyze the introduction of more comprehensive legislation for the digital asset ecosystem.
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