Brazil's cryptocurrency rules drive capital inflows as other markets see outflows

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Brazil's cryptocurrency rules drive capital inflows as other markets see outflows

Bitget-RWA2025/11/18 18:04

By:Bitget-RWA

- Brazil introduces tax on cross-border crypto transactions, aligning with CARF and OECD standards to close regulatory gaps and boost revenue. - Global crypto funds face $3.2B in outflows, driven by macroeconomic uncertainty and whale selling, contrasting Brazil's $42.8B crypto surge in H1 2025. - Brazil's $1.7T on-chain activity and stricter AML rules position it as a regional crypto oversight benchmark, expanding government visibility into crypto flows. - While U.S. crypto ETFs see $1.97B outflows, Germa

Brazil is experiencing an increase in cryptocurrency inflows, even as global investors are pulling out of crypto products due to shifting regulations and unstable markets. The nation is weighing the introduction of a tax on overseas crypto transactions,

in step with the international Crypto-Asset Reporting Framework (CARF)

, as part of efforts to address regulatory gaps and enhance government revenue. This initiative comes after

Brazil revealed that its crypto disclosure requirements will adhere to OECD guidelines

, enabling tax officials to access information on offshore crypto holdings. The Ministry of Finance is looking to broaden the Imposto sobre Operações Financeiras (IOF) tax to cover international crypto dealings—a tax that is usually levied on foreign exchange, credit, and insurance transactions

as part of its CARF compliance

This tax proposal comes at a time when

Brazil's digital asset market is expanding rapidly

, with stablecoins making up nearly two-thirds of the $42.8 billion in crypto trades during the first half of 2025. Globally, however, the crypto sector is seeing notable withdrawals: last week, crypto investment products saw $2 billion in outflows—the highest since February 2025, according to CoinShares.

BlackRock’s IBIT Bitcoin ETF alone experienced a record $463.1 million in redemptions

on November 14. This represents the

third week in a row of net outflows

, with worldwide withdrawals totaling $3.2 billion. Experts link this trend to global economic uncertainty, large-scale selling by major crypto holders, and a general move away from risk

based on market assessments

Brazil's cryptocurrency rules drive capital inflows as other markets see outflows image 0

Brazil’s regulatory reforms feature tougher anti-money laundering measures

, setting a new standard for crypto regulation in the region. The Central Bank of Brazil has

designated stablecoins as foreign exchange transactions

starting in February 2026, and now requires crypto businesses to maintain capital reserves between $2 million and $7 million, depending on their operations. Together with CARF adoption, these policies are designed to bring crypto activity into the mainstream financial sector and improve oversight of international transfers

in accordance with OECD principles

This regulatory initiative signals

Brazil’s deliberate shift

toward greater oversight of its crypto industry, which handled more than $1.7 trillion in on-chain transactions from mid-2024 to mid-2025. Although the 17.5% tax on crypto capital gains remains unchanged, the new measures

greatly increase the government’s ability to monitor

both domestic and cross-border crypto movements. At the same time, international investors are favoring multi-asset and short-Bitcoin approaches, with Germany seeing $13.2 million in inflows compared to the U.S.’s $1.97 billion in outflows

as reported by market analysts

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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