Brazil’s newly appointed finance minister, Dario Durigan, has reportedly delayed a public consultation regarding the application of the Imposto sobre Operações Financeiras (IOF) to cryptocurrency transactions. The move comes as the administration seeks to avoid legislative friction during a sensitive election year.
The Proposed Tax
The draft decree under consideration would classify specific cryptocurrency transactions—particularly those involving stablecoins—as foreign exchange operations. Under current Brazilian law, foreign exchange deals are subject to IOF rates ranging from 0.38% to as high as 3.5%.
Industry Pushback
A coalition of major industry groups, including ABcripto, ABFintechs, and Zetta, has voiced strong opposition to the plan. Representing over 850 companies, these organizations argue that:
- Legal Standing: Applying IOF to stablecoins is inconsistent with Brazil’s 2022 Virtual Assets Law.
- Asset Classification: Stablecoins are not fiat currencies and therefore should not be treated as foreign exchange instruments.
Political Context
Durigan, who assumed office on March 20 following the departure of Fernando Haddad, is reportedly prioritizing microeconomic stability. By shelving this consultation, the ministry aims to maintain a cooperative relationship with Congress. Reports suggest the government may also consider abandoning a separate proposal that would have ended tax exemptions on certain investment securities.
This development follows a February decision by the Brazilian Central Bank to include certain stablecoin activities within the scope of foreign exchange regulations, which had initially provided the legal framework for the Finance Ministry's tax exploration.