The Brazilian Ministry of Finance is set to launch a public consultation regarding a proposal to impose a 3.5% tax (IOF - Imposto sobre Operações Financeiras) on the purchase of cryptocurrencies and digital assets. Currently, there is no taxation on these transactions, and the government's initiative aims to stimulate public debate on the feasibility of such taxation and potentially define exemption limits. Notably, there is no estimated revenue projected from this taxation yet, as the proposal is still in the discussion phase.

The government’s rationale for introducing this tax stems from a recent exponential increase in cryptocurrency transactions, which have outpaced traditional currency exchange operations. Authorities recognize that cryptocurrencies currently enjoy a tax advantage over conventional foreign exchange dealings, prompting calls for equitable treatment between the two. This move is seen as necessary to level the playing field in financial operations, acknowledging the growing significance of digital assets in the Brazilian economy.

Additionally, the government views the taxation of cryptocurrencies as a potential tool to combat organized crime, particularly given that illicit actors have been utilizing these digital assets to move money abroad without detection. By aligning the regulatory framework governing cryptocurrencies with that of traditional finance, the government aims to enhance oversight and reduce financial crimes linked to these technologies.