Cryptocurrency Taxation in Brazil: Between State Oversight and the Economic Freedom of Individual Investors

Abstract

This article analyzes the main challenges and implications that cryptocurrencies present for Brazilian tax law, focusing on the relationship between government oversight and investors’ economic freedom, particularly that of individual investors. This research highlights the need for clear rules to ensure legal certainty and protect the rights of all cryptocurrency users. Given the extreme volatility of these assets and the high risks faced by investors, questions arise as to the extent to which tax liabilities and current regulations account for the risks associated with cryptocurrency investment. Bitcoin was selected as the primary cryptocurrency examined in this article because of its pioneering role. The study examined current legislation, including Normative Instruction No. 1,888/2019 and Law No. 14,478/2022, as well as the concept of cryptocurrency presented by Satoshi Nakamoto, works by independent authors, and the Brazilian Federal Constitution, among other sources. The findings indicate that cryptocurrency legislation in Brazil is still undergoing adaptation and continuous development, with gaps that create uncertainty for investors. At the time of this study, the absence of a clear definition of cryptocurrencies and the lack of specific rules make regulation and the establishment of tax oversight mechanisms difficult.