How Brazil protected its crypto ecosystem from crippling taxes

• Brazil’s Congress has rejected a temporary measure to tax virtual currency transactions, blocking a 17.5% tax on small holders.
• Brazilian crypto investors hold more than three times the average wealth of traditional investors, and 25% of them are billionaires.

of Brazilian Chamber of Deputies reached the decision on Wednesday, October 8, sparking an immediate reaction across the digital finance sector. Lawmakers rejected Interim Measure 1,303. The proposal would create a tax on crypto businesses and increase income tax rates on dedicated funds. That rate was set at 18%. This parliamentary action ends one of the world’s most contentious legislative challenges. Brazilian Congress In the last few weeks.

There are some things you just can’t understand.

Yesterday, MP 1303 was approved by the mixed committee by a narrow vote of 13-12.

Among those who voted in favor of the tax increase was Aureo Ribeiro, who had previously “defended” the cryptocurrency market and opposed the abolition of tax exemptions… pic.twitter.com/BMOSzQhlEM

— Declarand Bitcoin (@declarandobtc) October 8, 2025

Legislative process with favorable outcomes for cryptocurrencies

The proposed interim measures had received prior approval from a parliamentary joint committee. This initial approval sparked a strong reaction among companies and individuals investing in cryptocurrencies. Critics argued that the measure would create regulatory uncertainty and hinder the development of domestic innovation projects. Due to its rejection in the plenary session of the House of Representatives, the document immediately lost its validity. Therefore, this measure could not proceed to the stage of presidential sanctions.

The case has been in the spotlight since the joint committee vote. This topic caused quite a stir in the country. Crypto asset market And he managed to mobilize members of Congress who were firmly opposed to the proposal. The final result is being interpreted as a victory for companies in the sector, which had warned of the negative effects of the proposed tax. These companies are blockchain companies And Brazilian fintech will also be affected.

of Brazilian Congress In particular, he refused to abolish tax deductions for small crypto holders. The bill was withdrawn from the agenda with 251 votes in favor of deletion.

President Luiz Inacio Lula da Silva said the result was a defeat inflicted on the Brazilian people. Meanwhile, organizations representing the crypto sector openly celebrated the decision. The measure will impose a flat tax of 17.5% on traders who make trades of less than 35,000 reais, equivalent to about 6,500 US dollars.

of Brazilian Tokenization Association A blockchain company known as ABToken praised the legislative decision. The association described the result as a victory for the domestic cryptocurrency ecosystem. The federal government has previously calculated how much revenue the tax would generate. These forecasts calculate revenues in 2026 to exceed R$17 billion, or approximately US$3 billion.

Brazilian cryptocurrency investor profile

A study conducted by consultancy firm Altside has revealed specific data about Brazilian crypto investors. More than 25% of crypto investors already have total assets of more than R$1 million. These investors approach this sector with a focus on asset protection and portfolio diversification.

Altside’s research shows that positions are consolidating and profiles are becoming increasingly mature. The average assets of these investors amount to R$ 521,900. This number is more than three times the average traditional investor in this country.

Altside CEO Felipe Mendez said the myth of cryptocurrencies as a game for amateurs is a thing of the past. Mr. Mendez explained that digital assets have become a component of long-term investment strategies. These strategies are oriented towards wealth protection; Asset diversification. Almost half of the investors consulted declare their risk profile to be moderate.

This concern for security and control is also reflected in a preference for self-management of assets. In fact, 54.2% of investors prefer to manage their digital wallets directly. This option is in contrast to the alternative of a trusted, centralized management platform. A further 19% use staking systems to generate passive income. A further 17.5% maintain investments in stablecoins that generate some form of income.

The average Brazilian investor holds six different crypto assets in their investment portfolio.

Bitcoin leads the priorities with a presence of 84.9%. Ethereum takes second place with 65.6%, followed by Solana with 50.8%. of Stablecoin USDT comes in 4th place with 26.4%, while XRP occupies the top 5 with 24.8%.

We can see that the geographical distribution of investors is concentrated in the southeastern part of Brazil. The region accounted for 57.6% of all investors, with São Paulo state accounting for 31.3%. Investors from the southern region accounted for 18.1%, while those from the northeast accounted for 12%. The West and North Center regions have lower rates at 7.9% and 4.4%, respectively.

Altside’s research also shows that many investors between the ages of 40 and 70 consider cryptocurrencies to be a viable alternative. These investors are looking to shore up their financial reserves and secure retirement security. Factors such as high interest rates, global volatility, and the emergence of Bitcoin exchange-traded funds are influencing this behavior. There is a growing interest in assets that are uncorrelated with traditional markets.

Felipe Mendez concluded that Brazilian investors follow global institutionalization trends. crypto asset sector. Cryptocurrency is becoming a strategic pillar of wealth management for a growing number of the population. The survey was conducted during 2025 among a sample of 2,440 Brazilian investors.