Cryptocurrency Regulations in Brazil

Today, digital assets shape the global financial systems because they continuously evolve. Brazil also plays a role in advancing a concise cryptocurrency, making the country a big part of this transformation. Since the industry is evolving fast, understanding Brazilʼs framework is important for investors, businesses, and service providers. This blog communicates the current legal standing, compliance expectations, tax treatment, and regulatory progress in Brazil in 2025.

Is Cryptocurrency Legal in Brazil in 2025?

Yes, the legality of cryptocurrencies in Brazil has evolved significantly, with authorities aiming to support their innovation while protecting market participants.

Legal Status of Cryptocurrency

As of 2025, Cryptocurrencies are legal in Brazil, even though they are not considered legal tender. But they are regulated as financial assets. Individuals or businesses can hold, trade, and use cryptocurrencies given that they meet relevant legal and tax obligations. The governments see them as digital representations of value that are adaptable to the convenient use of a central authority.

Itʼ also important to know that crypto assets are not considered the same as Brazil's official currency. Only the Central Bank of Brazil has the power to issue legal currency, like the Brazilian Real.

Trading and Payment Usage of Cryptocurrency in Brazil

The use of cryptocurrency in Brazil is increasing for both trading and payments. The regulatory framework allows these activities under specific compliance conditions.

Cryptocurrency Trading in Brazil

Trading cryptocurrencies is fully permitted in Brazil and includes buying, selling, and exchanging digital assets through only licensed exchanges or peer-to-peer platforms. Brazilian authorities have also established a clear compliance obligation, specifically around AML measures and STRs submission. In 2022, crypto transactions exceeded BRL 12 billion (USD 2.4 billion), which underscores Brazilʼs fast development in digital asset adoption.

Cryptocurrency as a Payment Method

Though not legal tender, crypto is accepted for some payments voluntarily. must still comply with tax and AML obligations, especially since users have increased in Brazil (900,000). Organizations that accept cryptocurrencies as payments must maintain tax and AML obligations to maintain these users.

Who Regulates Cryptocurrency in Brazil?

The Central Bank oversees financial stability and innovation, including projects such as DREX CBDC. Receita Federal is responsible for handling tax enforcement, and COAD enforces AML compliance. Altogether, they form a coordinated regulatory framework.

Brazilian Securities and Exchange Commission (CVM)

The CVM is responsible for overseeing investments like Initial Coin Offerings (ICOs), ensuring that they follow securities laws, protect investors, and maintain market integrity. Their main goal is to prevent fraud and establish trust in the fast-growing digital asset space in Brazil.

How Is Cryptocurrency Taxed in Brazil?

As of 2025, Brazilʼs tax treatment of cryptocurrencies is continuously developing, with higher clarity designed for enhancing transparency, preventing illicit financial activities, and ensuring digital asset transactions make fair tax contributions.,

Key Tax Provisions for Cryptocurrency in Brazil

Capital Gains Tax in Brazil

Earnings that are earned from the sale or exchange of cryptocurrencies in Brazil are subject to progressive capital gains taxation, and the rates ranges from 25% to 22.5% depending on the totality of the amount of gains. Lower profits are taxed at a lower end of the scale, while on the other hand, higher gains encounter the maximum rate. In order to stay compliant, it is important for crypto investors and traders to calculate and report their profits in an accurate manner.

Reporting Obligations to Receita Federal do Brasil

Individuals and businesses are required to report monthly cryptocurrency transactions that are over BRL 35,000 to the Receita Federal do Brasil, which is the national tax authority. Failure to comply can possibly result in a high amount of fines and other penalties.

No Offset Allowed for Crypto Losses

While capital gains from cryptocurrency are taxable, todayʼs Brazilian tax law does not permit losses from crypto trading to be offset against other incomes such as employment income or investment returns. These restrictions highlight the importance of careful tax planning and having strong risk management.

Are Crypto Exchanges Regulated in Brazil?

In Brazil, the use of cryptocurrency exchanges is classified as Virtual Asset Service Providers (VASPs). These service providers actually play a big role in the functioning of digital asset transactions and are subject to regulatory oversight.

Licensing and Compliance for Exchanges

VASPs must register with the appropriate authorities and implement stricter compliance measures such as Know Your Customer (KYC) programs and AML protocol. These requirements support the country's efforts in preventing financial crimes and promoting market transparency.

VASPs are required to register with authorities and enforce strong compliance measures such as KYC and AML protocols. This additionally helps with transparency in the market and eliminates money laundering

Key Compliance Requirements for Exchanges

• Implement a comprehensive KYC procedure in order to verify the identities of the customers
• Adopt and enforce Anti-Money Laundering (AML) policies in order to detect and report suspicious activities that could possibly turn out as illicit financial activity.
• Submit a regulatory compliance report to Brazilʼs Financial Activities Control Council (COAF)

Failure to comply can result to financial penalties, license revocation, and/or legal actions

The Role of COAF in Crypto AML Compliance

Brazilʼs Financial Activity Control Council (COAF) serves as a key authority in preventing money laundering, specifically within the sector of cryptocurrency. Its role and responsibilities in enforcing AML standards and identifying financial crime risks in virtual asset transactions are central.

COAF's Key Responsibilities in Crypto Compliance

COAF works with VASPs and other financial institutions in order to ensure regulatory compliance. The key responsibilities are:

• Suspicious Transaction Monitoring: COAF utilizes advanced monitoring tools to detect suspicious or high-value crypto transfers. These systems help flag suspicious activity early, which allows investigations and intervention to be quick.
• Risk Client Profiles: Through the process of detailed risk profiling, COAF identifies individuals or entities who could potentially pose AML risks, like abnormal transaction patterns or someone who is related to or in the watchlisted parties. This procedure helps enhance the preventive efforts across the financial system.
• FATF Compliance: Brazilʼs AML framework is aligned with FATF recommendations, which strengthens the global cooperation with the country and maintains its financial systemʼs integrity. This alignment is important for cross-border compliance.

How Can Crypto Firms in Brazil Stay Compliant?

In order to stay compliant in Brazil, crypto firms are expected to have structured AML/KYC programs, refer to COAF tools, and stay updated by training and having a guidance expert.

What Can Firms Do As Proactive Steps?

• Invest in Advanced AML Technologies: Firms should take into account AML software in order to monitor, detect abnormal and suspicious financial behavior. This can help make sure that your organization stays responsive to emerging threats
• Establish Strong KYC System: Firms must have a strong KYC systems to verify customersʼ identities and asses risk profiles in order to prevent fraud while ensuring alignment with regulatory standards.
• Prioritizing Staff Education: Firms should provide regular compliance training to staff. This helps establish a well-informed team which is important for preventing financial crime.
• Partnership with Regulatory Authorities: Firms can partner with specialized advisors to counter regulatory requirements and ensure local and global compliance.

What Are the Tools for Compliance Management?

Crypto firms in Brazil can enhance their compliance by utilizing blockchain analytics, AML tools, and automated reporting specific to local regulations

Most Popular Cryptocurrencies in Brazil in 2025

In 2025, Brazil will host over 12 million active users of crypto, with adoption growing 40% in 2024. This is influenced by inflation concerns, fintech growth, and digital access.

Top Cryptocurrencies by Popularity in Brazil:

Mercado Bitcoin, considered Brazilʼs largest cryptocurrency exchange, states that from 2023 to 2024 it increased 2.3x, which signals the rising demand for stable assets among ongoing currency.

Brazilian investors are seen to be showing interest in tokenized real-world assets (RWAs) and domestically issued stablecoins. This shift was supported after the approval of Law 12.478 (2022), which recognizes crypto platforms as financial service providers.

Is Brazil a Crypto-Friendly Country in 2025?

Yes, Brazil is one of Latin Americaʼs most crypto-friendly countries. Even though they are not legal tender, the government has included clear tax rules that suggest innovation while protecting investors.

Brazilʼs Crypto-Friendliness Overview (2025):

Brazil is ranked 7th globally in crypto adoption, as stated by Chainalysis in a 2024 report, earning recognition for its balanced regulatory approach. The country is continuously leading in digital asset innovation through the Central Bankʼs Drex CBDC. This aims to put blockchain in daily financial operations, underscoring Brazilʼs efforts in shaping the further development of finance.