How the current Brazilian government, the LULA government, has negatively influenced cryptocurrencies (Part 1)
1. Heavier and less flexible taxation
Provisional Measure 1.303/2025 standardized the Income Tax rate on profits from cryptocurrencies at 17.5%, eliminating monthly exemptions of up to R$ 35 thousand and previous escalations (from 15% to up to 22.5%).
ABcripto classified the PM as a "setback," warning that it may drive investors to foreign platforms with less regulation.
Folha de S. Paulo emphasizes that the measure disregarded the positive work of the Central Bank, and that this is expected to weaken the local market.
2. Legal uncertainty and fear among investors
Cointelegraph Brazil highlighted that the fear of harsher taxes and the lack of regulatory clarity led to a 30% drop in investor interest in Bitcoin at the beginning of 2025.
The PM is seen as ignoring market dynamics and creating legal insecurity, especially for stablecoins and automated trades.
3. Increased oversight and invasive monitoring
The Federal Revenue's Normative Instruction expanded the monitoring of transactions via Pix, credit cards, debits, stablecoins, and even cryptocurrencies in general — all subject to registration and supervision, regardless of tax collection.
The "Safe Brazil" program, coordinated between the Central Bank, Federal Police, BNDES, and Febraban, aims to monitor exchanges, fintechs, and crypto companies, increasing state control over operations that were previously more private or decentralized.
4. Proposals for new taxes and obstacles to the market
The taxation of international cryptocurrency remittances was proposed, which would further raise costs for users and companies operating with global transactions.
There is also a 15% tax on cryptocurrencies held in foreign exchanges, created by a law enacted in December 2023 — reinforcing control over assets outside the country, but with still uncertain definitions about what exactly falls under the rule.