It's Time for Brazil to Lead the Change to the Future of Finance
TLDR: In October, Brazilians head to the polls. Tens of millions of votes will be cast by crypto holders. Cryptocurrencies are already part of people’s lives, with nearly 29 million Brazilians having or having previously owned digital assets and 65.8% of investors consider it important to vote for lawmakers committed to protecting the rights of digital asset users.
At the same time, regulators are weighing whether to reclassify stablecoins as electronic money or as foreign currency, bringing to light once again the risk of IOF taxation on crypto transactions and creating an unstable environment for the sector’s development.
The next government will have an opportunity to shape this path. General elections in Brazil are due to take place in October, which coincides with a significant milestone in the country's local virtual digital asset regulations: the deadline for VASPs to file their license applications.. The incoming government and Congress will have a unique opportunity to shape this trajectory, seize the momentum to internationalize the Real, and leverage the future of finance by building a regulatory framework that enables the stablecoin market to develop safely and sustainably while preserving its global interoperability.
Brazil’s Crypto Constituency
This is not a niche issue. Recent survey data from Datafolha and Paradigma Education, sponsored by Coinbase and Hashdex, shows how central crypto has become to Brazilian life:
Roughly 1 in 6 Brazilian adults — around 29 million people — own crypto, nearly three times the share investing in the stock market.
over 77% of investors earn less than three times the minimum wage.
Crypto holders skew young, lean toward the political center, and are more politically engaged than average, roughly 16% of the October electorate.
International Progress Means Competition is Growing
The future of finance is being built on open, always-on networks where people can hold, move and exchange value at the speed of the internet. For Brazilians, that means more direct access to global markets, new ways to save and build wealth, and financial services that can reach people underserved by traditional markets. Brazil can help shape that future or write rules that leave its citizens and currency on the sidelines.
Our Proposals on a Way Forward
The next government, whoever they may be, can take several concrete actions to support:
Develop a Robust Framework for Stablecoins: Maintain stablecoins as virtual assets under the existing crypto legal framework rather than reclassifying them as electronic money or foreign currency, and oppose IOF taxation. Reclassifying stablecoins or applying a financial-transactions tax would isolate Brazilians from accessing the digital economy, undercut BRL stablecoins before they can compete, and contradict the goal of internationalizing the Real.
Fund the regulators to match the mission. Systemic security and sustainable market growth rely on the BCB, CVM, and Receita Federal having the budgets, headcount, and technical expertise to supervise a 24/7 global market. Strong institutions — not broader prohibitions — are what protect consumers.
Invest in financial education. As the financial system moves on-chain, Brazilians gain unprecedented opportunities to engage with the global financial system to grow and manage their wealth. A national commitment to digital-asset literacy will determine whether they capture that opportunity safely. That literacy also needs to reach those who are elected, because their decisions directly shape regulation of the sector.
Elections are an opportunity for countries to consider what kind of economy they want to build. With millions of Brazilians already participating in the crypto economy, the political choices made in the coming years will have a strong impact on Brazil's digital financial ecosystem.
No matter who wins in October, Coinbase is ready to work with the Government and Congress on a framework that protects consumers and gives the Real a fighting chance on the global stage.
