Immediate increase of IOF on credit and exchange pressures the costs of purchases abroad, withdrawals, and transactions with crypto assets.
The Lula government announced, on May 22, a package of increases in the rates of the Financial Operations Tax (IOF) with immediate effect. Among them is the increase of the rate applicable to credit operations to 3.95% per year, equalizing the rate for individuals and legal entities, and the unification of exchange rates at 3.5% for credit cards, international debit, prepaid cards, traveler's checks, and cash currency purchases.
The adjustment in rates also brought immediate repercussions for the consumer. Those who use international cards and services such as remittances abroad now pay 3.5% IOF, up from 1.1% previously, raising the cost of purchases and withdrawals outside the country. In addition, taxpayers with VGBL pension plans who invest more than R$ 50,000 monthly now incur 5% IOF on the excess amount.
The decision is also beginning to affect the purchase of Bitcoin and cryptocurrencies by Brazilians at companies that operate with services 'outside of Brazil', as is the case with many banks, fintechs, among others, making Bitcoin 'more expensive' in Brazil.
Nubank, for example, announced a change in fees for purchasing cryptocurrencies in the app. In a statement published on the institution's blog, the bank made it clear that the increase in fees is due to the increase in IOF by the Federal Government.
With the change, fees increased on all buying and selling operations as per the table below, published by the bank.
Measure may affect other companies
Consulted specialists pointed out that the increase in IOF may also affect other companies and cryptocurrency exchanges in Brazil, especially those operating with crypto-as-a-service, that is, those that use infrastructure from other companies and eventually international exchanges.
However, so far, only Nubank has announced changes. The bank operates its cryptocurrency services with Paxos, which is also the issuer of the stablecoin USDC. However, companies like Mastercard, Mercado Pago, and PicPay also offer cryptocurrency services in Brazil in partnership with the American company.
For the CEO of the fintech DefiBank, Leandro Baccari, the increase in IOF may drive a rise in the use of stablecoins in the country, as operations with this asset are not subject to federal tax.
This movement of migration to stablecoins is not just a reaction to the increase in taxes, but a structural change: according to recent data, global adoption of stablecoins is growing exponentially, especially in emerging countries, where transaction costs and currency volatility are significant challenges,” he argues.
He adds that stablecoins are a powerful alternative for those who need to make international payments, preserve value in strong currencies, or even access financial markets without intermediaries. The growth of solutions that facilitate direct access to these assets tends to intensify in the face of taxes like IOF.
However, it is possible that stablecoins will be included under the rules of the foreign exchange market, according to what is provided in the Public Consultation 111/2024 of the Central Bank (BC). If this happens, it could create an unsustainable environment for exchanges in the country, according to OKX and other crypto companies in the country.