USDT’s Rise in Brazil: A Response to Economic Instability
Brazil’s crypto market has become increasingly dominated by USDT, the dollar-pegged stablecoin issued by Tether. Recent reports indicate that USDT now accounts for 56% to 80% of Brazil’s total crypto transaction volume, with on-chain data revealing USDT transactions totaled R$271 billion ($55 billion) in 2025—nearly double Bitcoin’s volume . This surge is not a coincidence—it reflects the country’s economic realities and growing public mistrust in the real. Amid persistent inflation (projected at 5% in 2025) and a weakening currency, 12% of Brazilians (26 million users) now own crypto, primarily using USDT as a hedge, store of value, and functional payment method .
The Brazilian central bank reports that nearly 90% of all crypto-related flows are tied to stablecoins, with USDT leading the pack. A July 2025 survey shows 91.8% of Brazilian crypto users aged 23-45 hold stablecoins, and 83% specifically hold USDT—with 43.5% expressing “full trust” in Tether . As the real depreciates (trending at BRL 5.4–5.8 per USD) and economic volatility intensifies, USDT adoption has soared not just among traders, but across broader financial activities. This shift signals more than speculation—Brazilians are using USDT to navigate economic uncertainty, manage cross-border payments, and secure value in a turbulent fiscal environment where traditional banking access remains limited.
The motivations driving this USDT surge are both practical and emotional. For many Brazilians, holding dollars has always been a strategy against inflation. Now, USDT allows them to do so digitally, efficiently, and without relying on traditional banks. This leap from physical to digital dollarization underscores Brazil’s growing dependence on decentralized finance solutions to fill institutional gaps. Notably, 85% of Brazilian crypto users express desire to use crypto for everyday purchases, yet face systemic barriers preventing real-world application .
Real‑World Use Cases in Brazil
Commodity Trade & Export Payments
Tether acquired a 70% stake in Adecoagro, a major agricultural exporter in Brazil, Argentina, and Uruguay. The goal is to embed USDT into grain and ethanol trade. Brazilian exporters can now receive payment instantly in USDT, which local banks like Bradesco convert back to reais within seconds. This process slashes traditional forex delays from days to moments and cuts costs significantly. Cross-border B2B transactions using crypto like USDT accounted for 5.4% of global trade settlement value in 2025, with Brazil emerging as Latin America’s fastest-growing market .
Remittances & Cross-Border Transfers
Brazilians working abroad or sending money across borders are increasingly turning to USDT. Traditional wires often incur high SWIFT fees and slow delivery. USDT transfers complete in seconds for minimal cost. Cross-border settlements using Tether surged to over $30 billion in Q1 2025 alone, particularly between Brazil and Southeast Asia . In some regions, recipients even withdraw dollars directly from ATMs using their stablecoin wallets. Blockchain-based remittances now comprise 9.6% of global flows, with Brazil’s corridors to Argentina and the U.S. expanding rapidly .
P2P and DEX Trading
Peer-to-peer markets and decentralized exchanges in Brazil use USDT as the primary liquidity source. Traders exploit price gaps between local exchanges and global markets. Stablecoin volume from Brazilian exchanges to foreign platforms has surged by over 200%, showing high usage for arbitrage and capital mobility. USDT is integral to this ecosystem, with 70% of OTC crypto trades in emerging economies settled in USDT . Despite this, infrastructure friction persists: 41% of users cite high transaction fees as a barrier, while 39% note insufficient merchant acceptance .
DeFi, Payments, and Yield Farming
With high local interest rates but limited banking access, many Brazilians embrace USDT for DeFi access. They use stablecoins to stake, lend, or earn interest on global platforms—with Yearn Finance offering up to 8% APY for USDT holders . Fintech firms and merchants are beginning to accept USDT for goods and services, evidenced by a 22.7% increase in crypto-enabled POS terminals in 2025 . It is even being piloted for payroll and B2B payments, though adoption remains nascent: only 37% of Brazilian stablecoin holders have used crypto in real-world settings .
Future Outlook
Brazil’s economic environment shapes USDT’s future. GDP growth remains steady at 2–2.5% through 2026. However, inflation stays elevated at around 5% in 2025 and 4–4.5% in 2026. This backdrop favors stablecoins as inflation hedges and dollar substitutes. Regulatory developments will be pivotal: the Central Bank’s public consultations on Virtual Asset Service Providers (VASPs) concluded in early 2025, with final regulations expected by year-end .
Central Bank Digital Real (Drex) Coexistence
Brazil is piloting a CBDC alongside stablecoins. The central bank envisions a hybrid monetary model where Drex operates with private stablecoins like USDT and USDC. Phase 1 testing revealed significant technological hurdles, particularly around transaction privacy on Ethereum-based networks . If regulated well, USDT could complement Drex rather than compete—especially if Drex focuses on domestic retail payments while USDT handles cross-border settlements. The pilot’s success hinges on resolving privacy/security trade-offs identified in Hyperledger Besu implementations .
Regulatory Clarity Ahead
Regulators are planning clear rules around stablecoins. Brazil may restrict withdrawals to self-custodied wallets, requiring transfers through licensed providers. This framework aims to control capital flows without killing innovation. Key proposals include :
- Minimum capital requirements of R$1–3 million for VASPs
- Strict AML/KYC procedures aligned with FATF Travel Rule standards
- A 17.5% flat tax on all crypto gains, eliminating previous exemptions
Strengthening Merchant Integration
Fintechs and banks are piloting stablecoins for commerce and payments. By 2025, up to 24 million Brazilians may hold digital stablecoins—a 92% increase from 2024 . B2B stablecoin volume has grown from under $100 million to over $3 billion monthly. This signals deeper real-world integration ahead, particularly if solutions like “Pix Automático” (launching June 2025) enable recurring USDT payments for bills . However, infrastructure must improve: transaction slowness (17%) and poor UX (11%) remain key bottlenecks .
Dollar-Real Exchange Pressure
The Brazilian real trends between BRL 5.4 and 5.8 per dollar through early 2026. Persistent volatility reinforces the appeal of dollar-pegged USDT, especially in countries with >20% inflation where crypto adoption is 2.7x higher than in stable economies . Argentina’s 85% inflation in 2025 drove 29.4% crypto ownership—a pattern mirroring Brazil’s trajectory .
Global Stablecoin Momentum
Stablecoins are gaining global traction. On-chain stablecoin volume reached $27.6 trillion in 2024, with Tether alone settling $1.35 trillion that year . Brazil stands to be a key regional hub in this expanding ecosystem, particularly as Southeast Asia—its major trading partner—records 36% YoY growth in USDT transactions .
Key Takeaways
USDT dominates Brazil’s crypto economy, accounting for 56–80% of total volume. Stablecoins handle nearly 90% of crypto flows overall, with 83% of users holding USDT specifically .
The real’s volatility and forex restrictions pushed Brazilians toward USDT. It provides dollar peg stability and bypasses capital controls, with 85% of users expressing desire to use crypto for everyday transactions .
Real-world usage still lags. Surveys show 83% hold USDT, but only 37–54% use it for everyday payments. Infrastructure gaps (high fees, low merchant adoption) and regulatory uncertainty remain major barriers .
Regulators are stepping in. Central Bank proposals may restrict stablecoin withdrawals to self-hosted wallets through licensed VASPs, mandate R$1–3M capital reserves, and enforce FATF Travel Rule compliance to curb illicit activity and enforce FX monitoring . These measures aim to balance innovation with oversight.
Brazil is also developing a CBDC, Drex, which faces technological privacy challenges but could coexist with USDT in a hybrid monetary model if regulated properly .
Looking ahead, expect USDT use in trade, remittances, and finance to grow alongside clearer regulation and improved payment infrastructure—especially as Brazil’s crypto market revenue projects to reach $353.5 million by 2030 .
