In an effort to curb the fiscal deficit and reorganize the tax system, the Brazilian government has announced a series of measures that directly impact financial operations — among them, the Tax on Financial Transactions (IOF). This tax, historically used as a flexible tool of economic policy, is now undergoing a fundamental reconfiguration that will affect both local corporate strategies and global companies operating in Brazil.
Although a reduction in the IOF had been anticipated, it is unlikely that the rate will return to the 0.38% level, and any adjustment remains contingent on the approval of new measures by Congress. Beyond the IOF, the tax reform proposal includes changes that impact investment funds, debt instruments, and the taxation of financial institutions — including fintechs and digital asset services.
However, this technical discussion is part of a broader context: the growing tension between financial innovation and monetary sovereignty. As Ben Reid, Head of Stablecoins at Bitso, points out, the unstoppable rise of digital money — particularly stablecoins — is reshaping the dynamics of financial power in Latin America and around the world.
IOF 2025 and new taxes: What changes for companies?
With the new tax package, the Brazilian government is proposing the following key changes:
These measures will not take effect immediately: the government has confirmed there will be a grace period, in accordance with the principles of the "noventena" or annuality, allowing time for companies to adapt.
Why are governments reacting? The pressure from decentralized money
The Technical Analysis of IOF Shouldn’t Obscure the Broader Context. This isn't just about raising more taxes or reforming a complex system, it’s about responding to the growing pressure of the digital financial ecosystem.
Every week, a new country enters the debate on how to regulate stablecoins.
Brazil even considered banning transfers to self-custody wallets. What’s at stake? Nothing less than governments’ ability to manage their monetary and fiscal policy in the face of fast, low-cost, and borderless payment systems enabled by stablecoins.
Stablecoins are revolutionizing international payments, remittances, treasury management, and trade finance. Their usage has surged: in April 2024, the monthly volume of stablecoin transfers reached $1.68 trillion, highlighting their growing role as a real alternative to traditional systems.
But this advancement comes with a dilemma: digital “dollarization.” If USD-pegged stablecoins become dominant, central banks will struggle to maintain control over their local currencies. This shift could limit their ability to steer inflation, interest rates, and capital flows — posing a significant challenge to national economic sovereignty.
A possible solution — already considered by several regulators — is the development of stablecoins backed by local currencies. These could offer the benefits of blockchain technology without compromising the monetary sovereignty of countries.
Although still incipient, this trend may represent an intermediate path between innovation and control. They will not replace the dollar in the short term, but they may allow governments to participate in financial evolution without being left on the sidelines.
In this scenario, the new IOF is not just a revenue-generating mechanism: it is a signal of how Brazil and other economies are beginning to outline their strategy in the face of a decentralized, competitive, and increasingly adopted global financial system by companies of all sizes.
The IOF reform and the new fiscal measures in Brazil should be understood as part of a broader process of structural adaptation. The rise of digital money, especially through stablecoins, presents both challenges and opportunities. For global companies operating in Latin America, the key will be to understand these changes, adapt quickly, and strategically assess how technologies like blockchain and digital assets can optimize their cross-border payment structures in a transforming regulatory environment.
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