Explained – Rio de Janeiro’s ‘plan’ to accept taxes in crypto

ambcrypto.com:

Can you imagine paying your taxes in crypto? If you wonder what that might entail, the crypto-traders of Rio de Janeiro might be able to give you some answers in 2023.

The former Brazilian capital with a population of 6.45 million is reportedly working towards making this a reality. Needless to say, there are larger forces at play as well.

News companies world over quickly reported that Rio de Janeiro would accept crypto-taxes starting next year. However, some caveats do apply. A news report by Brazil’s Portal do Crypto has warned that there isn’t yet any official information about which crypto would be accepted for tax purposes. Furthermore, the collected crypto-tax is to be converted into Brazilian reais so as to avoid price volatility issues.

That being said, there are tentative plans to see whether a percentage of the city’s treasury can be turned into crypto for future use.

How likely is it that Rio residents will embrace the new tax scheme and give their crypto to the government? It’s hard to provide an exact figure, but crypto-adoption is surging in the South American country. The Blockchain LatAm Report 2022 by Sherlock Communications found that almost 5% of Brazil’s population owns crypto and crypto ETFs are in demand. It added,

“The first Crypto ETF, HASH 11, launched by Hashdex, ranks as the second-most purchased futures on the Brazilian stock exchange with more than 130.000 investors. In total, Brazilians invested BRL 5.629 billions in crypto related investment products approved by CVM.”

Rio de Janeiro is reportedly bringing some crypto-companies on-board to help deploy its ambitious tax plan. While the names haven’t been announced yet, there are guesses that one might be a familiar exchange giant.

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