Brazil industry groups say extending IOF to stablecoins would be unlawful

ABcripto, ABFintechs, Abracam, ABToken and Zetta — representing more than 850 companies across Brazil’s fintech, virtual asset and market infrastructure sectors — warned that expanding the financial transactions tax (IOF) to stablecoin operations could harm innovation and violate existing law.

The groups argue the Constitution limits the IOF to settlement of currency exchange transactions involving delivery of national or foreign fiat currency, while Law No. 14,478 (the Virtual Assets Law) explicitly states virtual assets are not national or foreign fiat currency.

On that basis, they say stablecoins cannot be treated as instruments representing foreign currency under IOF rules and that any attempt to expand the tax by decree or administrative rule would be unlawful, because new taxes or expanded tax triggers must be approved by the legislature.

Brazil

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