The Rise of Stablecoin Trading in Brazil: Tether Dominates the Market

Introduction

The Brazilian Tax Authority (RBF) has recently acknowledged the significant growth in stablecoin trading within the country's cryptocurrency market. In particular, Tether's USDT has emerged as the most transacted stablecoin, with a trading volume of over 271 billion reals (approximately $54 billion) since 2019.

Stablecoins Surpass Cryptocurrencies

The RBF reports a "vertiginous growth" in the trading of stablecoins, which are tokens tied to the value of other currencies. These stablecoins offer more stability in value compared to cryptocurrencies like Bitcoin (BTC), making them increasingly attractive as a means of payment.

Leading Stablecoins in Brazil

According to data received from exchanges, Tether's USDT, USD Coin (USDC), and BRZ (a Brazilian real-pegged stablecoin) are the most traded stablecoins in Brazil. Among them, USDT dominates with the highest trading volumes, accounting for 80% of all transactions in 2023.

USDT's Market Dominance

The Brazilian tax authority confirms USDT's leadership in the local cryptocurrency market, emphasizing its potential impact on future regulatory oversight. During the first two quarters of 2023, USDT transactions amounted to over $18 billion, representing more than 80% of the total trading volume for that period.

Implications for Tax and Regulatory Scenario

The increasing prominence of stablecoins, particularly Tether, has prompted the Brazilian tax authority to closely monitor their use. The institution acknowledges that the rise of stablecoins could have significant implications for the tax and regulatory landscape surrounding cryptocurrencies in the country.

Tether's CEO Responds

Tether's CEO, Paolo Ardoino, attributes the growth of USDT adoption in Brazil to its usefulness in solving real-world problems. He explains that when a product effectively addresses the needs of users, it naturally gains traction and popularity.

Brazilian Preference for Stablecoins

In January, Brazilian experts highlighted the reasons behind the preference for stablecoins over traditional currencies like the US dollar. Factors such as the absence of administration or performance fees, as well as the presence of a 24-hour liquid market, make stablecoins an attractive option for hedging against devaluation and inflation.

Conclusion

The prevalence of Tether's USDT in the Brazilian cryptocurrency market reflects the growing popularity of stablecoin trading. As stablecoins continue to dominate the market, it is essential for regulators and tax authorities to adapt their frameworks to address the implications of this shift. The rise of stablecoins in Brazil signifies a significant development in the country's digital currency landscape.

What are your thoughts on Tether's dominance in the Brazilian cryptocurrency market? Share your opinions in the comments section below.

Frequently Asked Questions

What type of IRA is used for precious metals?

A Individual Retirement Account (IRA), is an investment vehicle offered by most financial institutions and employers. A IRA is a way to make money and allow it to grow tax-deferred, until you withdraw it.

You can save taxes by setting up an IRA and then paying them off when you retire. This means that you can deposit more money into your retirement plan than have to pay taxes on it tomorrow.

An IRA has the advantage of allowing contributions and earnings to grow tax-free until you withdraw your funds. If you do withdraw the funds earlier than that, you will be subject to penalties.

Additional contributions can be made to your IRA even after you turn 50, without any penalty. You'll owe income tax and a 10% federal penalty if you withdraw from your IRA in retirement.

Refunds received before the age of 591/2 are subject to a penalty of 5% from the IRS. There is a 3.4% penalty for withdrawals between the ages 70 1/2 and 59 1/2.

Withdrawal amounts exceeding $10,000 per year are subject to a 6.2% IRS penalty.

What is the best way to make money with a gold IRA?

Yes, but it's not as simple as you think. It all depends on your willingness to take on risk. If you can afford to invest $10,000 every year for 20-years, you could possibly have $1,000,000 by retirement age. You'll end up losing everything if you place all your eggs in the same basket.

Diversifying your investments is essential. Inflation makes gold a good investment. You should invest in an asset that increases with inflation. Stocks can do this well as they rise when profits are increased. Bonds are also able to do this. They pay interest every year. They're very useful during periods of economic growth.

But what happens if inflation is not present? In deflationary periods stocks and bonds both fall in value. This is why investors should not invest all of their savings in one investment, such a bond mutual fund or stock mutual fund.

Instead, they should combine different types funds. They could invest in stocks or bonds. They could also invest both in bonds and cash.

They are exposed to both sides of a coin. Inflation and depression. They will still experience a return with time.

How to Open a Precious Metal IRA

The best way to open an IRA for precious metals is by opening a self-directed Roth Individual Retirement Account (IRA).

This type account is better than others because you don’t have any tax on the interest that you earn from investments until you remove them.

It is attractive for people who want to save money, but need a tax break.

You do not have to only invest in gold and silver. You can invest in anything you want if it fits the IRS guidelines.

Although most people think of gold and silver when they hear the term “precious metal,” there are many kinds of precious metals.

These include palladium, platinum, rhodium,osmium,iridium, andruthenium.

You have many options to invest in precious metals. You can buy bullion coins or bars, or shares in mining businesses.

Bullion Coins or Bars

The easiest way to invest in precious materials is to buy bullion coins or bars. Bullion refers to physical ounces (or grams) of gold and/or silver.

You get actual bullion bars and coins when you purchase bullion coins.

While you may not immediately see any change after buying bullion coins and bars in a store, there will be some long-term benefits.

For example, you will get a tangible piece of history. Each coin and each bar have a story.

When you look at face value of the coin, you'll often find that it's worth far less than its nominal value. The American Eagle Silver Coin cost $1.00 an ounce in 1986 when it was first introduced. Today, however, the American eagle's price is closer to $40.00 per an ounce.

Bullion's price has risen dramatically since its inception, so many investors would rather invest in bullion coins than futures.

Mining Companies

Investing in shares of mining companies is another great option for those looking to buy precious metals. You are investing in the ability of mining companies to produce gold or silver.

You will be paid dividends that are based on the company’s profits. These dividends will then go towards paying out shareholders.

Furthermore, the company has the potential to grow. As demand for the product increases, so should the share prices of your company.

This is why it's important that you diversify your portfolio. Stocks can fluctuate in prices so it's important to diversify. This means spreading your risk across multiple companies.

However, mining companies are not immune to financial loss just like any stock-market investment.

If gold prices plummet significantly, ownership of your shares could be worthless.

The Bottom Line

Precious metals such silver and gold provide an economic refuge from uncertainty.

However, both gold and silver are subject to wild swings in price. If you are interested in long-term investing in precious metals, open a precious Metals IRA account at a reputable firm.

By doing this, you can reap the tax benefits and still have physical assets.

Is it a good idea to open a Precious Metal IRA

Answers will depend on whether you have an investment goal or how high you are willing and able to tolerate risk.

If you plan to use the money for retirement, you should open an account now.

This is because precious metals are more likely to appreciate in the future. They offer diversification advantages.

Additionally, silver and Gold prices tends to move together. They are therefore a better option for investing in both assets.

You should not invest in precious-metal IRAs if it is not your intention to use your money for retirement, or if you are unwilling to take any risks.

Can I place gold in my IRA account?

Yes! You can include gold in your retirement plan. Gold is an excellent investment because it doesn't lose value over time. It also protects against inflation. You don't even have to pay taxes.

Before you decide to invest in gold, it is important to understand that it isn't like other investments. You cannot buy shares of companies that are gold, like stocks and bonds. Nor can you sell them.

Instead, you must convert your gold to cash. This means that you'll have to get rid of it. You cannot keep it.

This makes gold an attractive investment. Like other investments, you can always dispose of them later. This is not true for gold.

Worse, the gold cannot be used as collateral for loans. For example, if a mortgage is taken out, you may have to sell some of your gold in order for the loan to be paid.

What does all this mean? Your gold can't be kept forever. It will eventually have to be converted into cash.

But there's no reason to worry about that now. All you need to do is create an IRA. Then you can invest your money in gold.

Can you make money from a gold IRA

To make money from an investment you must first understand how it works and secondly what products are available.

You shouldn't trade if you don't have the right information.

Also, you should find the broker that provides the best service possible for your account type.

Many different accounts are available, including standard IRAs and Roth IRAs.

If you have any other investments such stocks or bonds, you may want to consider a rollover.

Statistics

To qualify as IRA allowable precious metals and be accepted by STRATA, the following minimum fineness requirements must be met: Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure. (stratatrust.com)
If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
Same tax rules as traditional IRA SEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less Before setting up a Silver IRA, understand the fees and IRS restrictions. (sltrib.com)
The maximum yearly contribution to an individual's IRAs is currently $6,000 ($7,000 for those 50 years or older), or 100% of earned income, whichever is less. (monex.com)

External Links

How To

How to transfer your IRA into a gold IRA

So you want to move your retirement savings from a traditional IRA into a gold IRA? This article will guide you through the process. Here's how you can do it.

The process of transferring money out of one type of IRA (traditional) and into another (gold) is called “rolling over.” This is done because tax advantages go along with rolling over an account. In addition, some people prefer investing in physical assets like precious metals.

There are two types IRAs – Traditional IRAs (or Roth IRAs). The difference between these two accounts is simple: Traditional IRAs allow investors to deduct taxes when they withdraw their earnings, while Roth IRAs don't. If you invest $5,000 in a Traditional IRA now, then you'll be able only to withdraw $4,000. If you invested the same amount in a Roth IRA, however, you'd be able to keep every penny.

These are some things to consider if you plan to convert from a Traditional IRA to a Gold IRA.

You must first decide whether you want to transfer funds from one account to another or roll over your current balance to a new account. Any earnings over $10,000 will be subject to income tax at the regular rate. However, if you roll over your IRA, those earnings won't be subject to tax until you reach age 59 1/2.

Once you've made up your mind, you'll need to open up a new account. Most likely, you will need to present proof of identity such as a Social Security Card, passport, or birth certificate. Then, you'll fill out paperwork showing that you own the IRA. Once you've filled out the forms you'll send them to your bank. After verifying your identity, they will give you instructions about where to send wire transfers or checks.

The fun part is here. The fun part is when you deposit cash into the account, and then wait for the IRS approval. You will be notified by mail that your request has been approved.

That's it! Now you can just sit back and enjoy the growth of your money. Keep in mind that if your mind changes about converting your IRA to another type, you can simply close it and transfer any remaining balance to a new IRA.

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By: Sergio Goschenko
Title: The Rise of Stablecoin Trading in Brazil: Tether Dominates the Market
Sourced From: news.bitcoin.com/brazilian-tax-authority-acknowledges-vertiginous-growth-of-stablecoin-trading/
Published Date: Wed, 01 Nov 2023 07:30:25 +0000