Dare I Do it...Crypto Used as Way to Access Cash in Brasil

Interesting topic!

The first question that comes to my mind is "why would that be an advantage over other ways to transfer money?".

The simplest way to access cash would be using a US based debit or credit card.  The next method would be transfer money using a service such as Wise.

Using crypto, as a US tax resident, requires a number of complex steps to keep it legal.

1. You need to report ownership of crypto on you US annual tax filing.
2. Crypto is considered property, so any gains in value from the point you buy, to the point you 'sell' in BRL, come with capital gains tax.
3. Accounting for each 'transfer' would require you keep track of the price you purchased (in USD), then sold at (in BRL), and you'd need to convert the BRL to USD for tax purposes, figure out any capital gains, then pay tax on each transaction, if applicable.

I'm not certain the crypto regulations in Brazil.  Another thing I'm not sure about is the legality of transferring money this way in Brazil.  Brazil often requires documentation for legitimate money transfers to identify the source of funds (the idea is to prevent money laundering), and presumably you'd be bypassing this mechanism.

Other risks would include volatility, and risks associated with keeping you crypto on an exchange instead of your own wallet, and there are likely more I'm not aware of.

'm no expert in using crypto to transfer money. I know it has been done, but I see the list above as a partial list of challenges, at least for people from the US.

For me, if the goal is to transfer USD->BRL, there are likely much simpler and less risky ways to do so (Wise, bank transfers, using US accounts at Brazil ATMs...).

03/06/23 According to NuBank's Brazilian blog, anyone owning more than R$5,000 in crypto anywhere in the world on 12/31 has to report it in the Property section of their Brazilian Income Tax return for that year.

In any month that a person transacts R$35K or more in crypto, the transaction(s) must be reported to the Receita Federal, and taxes paid on the profits. Profits on transactions below R$35K in a month are exempt from income tax.

Note that these limits are all set in BRL.

This is definitely something to discuss with your accountant before doing it.

https://blog.nubank.com.br/imposto-de-r … edas-2023/

@BRBC

Wow!

You're good, thorough & dang fast!

I agree.  And so far, the best way I have found, is what you mentioned - using a US Credit Card

Re: Volatility, I think that Tether/ USDT type of Crypto would be the best way to avoid that.

However, the whole issue about all the 'oversight', aka "Paperwork", would seem to make using anything Crypto to be problematic.

Perhaps they best way to use Crypto would be in a situation where one is buying an apartment from a seller who would accept a crypto deposit in a less restrictive country.  When that seller wants to access/convert the funds to their home currency, they do it without even having anything 'touch' Brasilian 'financial space.'

But then, if you bought a big ticket item like an apartment, there's the sales amount that has to be declared ,& taxed.

There may have been a time that using Crypto (or anything else) could have been done without the eyes & hands of governments getting involved.  I think that time has long passed.

@abthree This is the kind of info we need to know.  Thank You!

@archlab “There may have been a time that using Crypto (or anything else) could have been done without the eyes & hands of governments getting involved.  I think that time has long passed.”

The US government is getting ready to get way more involved. Digital currency is on the horizon. Cash will be a fond memory. At least that’s what l have heard.

So l just got back from my local supermarket. They just changed all 6 of their self checkouts to card only. No longer accepting cash. I wonder how much longer until all the checkouts stop taking cash?

I've said this so many times.....

It is GUARANTEED that cash or equivalent anonymous mechanism will never be totally eliminated.

It may be rude to say this but its only common sense.

Politicians dont know what to do with themselves without hookers and blow......

So l just got back from my local supermarket. They just changed all 6 of their self checkouts to card only. No longer accepting cash. I wonder how much longer until all the checkouts stop taking cash?
-@KenAquarius

Crypto is a mess. Apart from all the scammers and plain thieves, the whole thing is manipulated like crazy to benefit the few who run it.

The potential losses are far greater than the potential gain for the average users.

Essentially, the whole thing is a massive scam.

A simple card available from a thousand banks can be used in most shops anywhere in the world, and the charges, if you choose the right card, are massively lower than the likely losses from crypto.

The above mentioned cashless - That's a worldwide thing. I still use a card in some places, but I mostly pay for goods and services using a banking app on my phone. The phone option is less than worldwide at the moment, but my favourite app works in Thailand, Malaysia, Philippines, and Singapore.

It's worth checking non-crypto options available local to you.

03/06/23 I've said this so many times.....
It is GUARANTEED that cash or equivalent anonymous mechanism will never be totally eliminated.
It may be rude to say this but its only common sense.
Politicians dont know what to do with themselves without hookers and blow......
-@Inubia

I have no doubt that technically you're right, but here in Manaus any bills smaller than R$20 are becoming increasingly rare; as for coins, I haven't seen any since just before the covid shutdowns.  It may take a little longer to get to your part of Bahia, but I'll bet that places like Vitória da Conquista and Feira de Santana are seeing the same thing.

If beggars are accepting PIX -- and they are -- it's only a matter of time before providers of highly personal services are, too, if they're not already.

I don't know if this dude read the news, every week there's some report of some Krypto King fleecing investors, and there's been plenty in Brazil lately.   

I spoke with a couple Krypto heads seeking rentals here.  They are weirdos.   Very quirky ones. The underwriter for the security deposit, denied cosigning on one of them.

Go watch some Peter Zeihan stuff on the Tube. He gets it incorrect on Brazil, but on Energy Markets, Defense & War, and Demography, he is the name to reckon with.  He will tell you what he thinks about Krypto.

You want to invest, without losing your shirt.,  Get some vintage material on Peter Lynch, the retired Fidelity's Magellan Fund manager.  A guy with the track record of beating S&P 500.   

He  unmistakably said, ad nauseum, there is no need to be a financial whiz to invest. You have to know where you are investing, and that insight comes often as a consumer, employee.  He used to bring the example of Dunkin Donuts as a company he made money,. because he knew Dunkin Dunkin ( oddly at that time, owned by Allied Domecq ). way was a successful one.

Ty Cobb made a bounty with Coca Cola's shares way back when he played and after retirement.

Warren Buffet's firm  used to own shares on Gillette before Proctor & Gamble.  Printing money indeed. 

Krypto is Ponzi Scheme.  No ifs or buts.  It adds no value to the economy or society.

And if you think Central Banks are going to let Krypto scammers for too long, well, see what China just did last year to this market.   Krypto = conduit for capital flight. 

The Brazlian Government has been no endorser of this.  The way they figure, you are earning through speculation, they want their share in taxes.  If you tank, your problem, not theirs.

You didn't read my post, I can see.

But thanks for the time & effort.

I used to transfer money over in bitcoin and convert it to reais, but it was always an unstable way to do the transfer and risky. I would avoid it if you can. One good thing about Brazil is that there will generally always be small farmers willing to swap food for other things, so if you want to fly under the radar you can pay in barter (eg. eggs for english lessons!), but I don't think transferring money into and out of Brazil using crypto is a really good idea.

Generally, if you want to know the best way to deal with money in Brazil, the best way is to make friends with some rich Brazilians and ask them what they do. They've already worked it out. I had a doctor friend who would keep her money in USD but in a Brazilian bank. That way she protected herself from fluctuations in the real but also was able to get her money when she wanted it.  I suppose the other way they deal with money is to depend on their family members when they have a crisis, but this isn't usually something a gringo can do.... unless you marry into a rich family!

@pup8617 it’s the same everywhere. The people with money and connections always have the inside information

hello

I think your "problem" is easy to solve. you find a person who buys the crypto with cash payment.

I have lots of contacts in Europe but not in Brazil

Some Brazilian investors on this Crypto hype lost their shirts on this.  The Brazilian press & media made a lot of hoopla about this. 

It's not illegal in Brazil, but as a form of a legal tender, and expecting a property seller to take you up on Crypto money, .... fat chance. 

That dude, Sam Bankman, and some other exchanges caused a lot of distress on these shores.   Some folks lost all of their savings in it. 

Brazilians are by nature very conservative.  The amount of people who save and bet on Equity Markets is tiny as to comparing with their US counterparts.    Most people here place their money on Government Backed Securities ( they all have soup letters names )_.