It may not even be a good investment if the dollar is at an all-time high and doesn’t have much more to go up. But two things are a fact:
1) It is impossible to know whether today’s R$6 is a peak, or just part of a path to higher values in the short/medium term.
2) In times of constant rise in the dollar, the willingness to invest in dollars increases. Even if it’s in the most brutal way: buying American currency to protect yourself from the devaluation of the real.
The good news: there is a way to have dollars without paying IOF and with relatively low fees, even if it’s not exactly dollars; but an asset that follows the fluctuation of the American currency (which has risen 23% in the last 12 months).
We are talking about stablecoins.
They use the same security and transparency technologies as common cryptos, but with a peculiar characteristic: their value is always fixed at US$1; in joy or in sadness, in health or in sickness.
To achieve this, companies like Tether, owner of the largest stablecoin in the world, USDT; or Circle, USDC’s parent company, guarantee that for each asset in circulation there is US$1 stored in their cash registers. It is the backing of these currencies.
Until 1971, gold was the backing of the dollar. In theory, each country that had American currency in its reserves could go to the US Central Bank and exchange each note for a certain amount of gold.
With USDTs and USDCs it is the same thing. Companies hold real dollars so that they give value to their “crypto dollars”. And what is a crypto version of a fiat currency for?
This is for fiat currency runs on blockchain networks – something she “doesn’t know” how to do. Crypto knows. And that has advantages.
While the traditional foreign exchange market operates primarily during business hours, stablecoins can be traded 24 hours a day, 7 days a week, whereas the blockchain network does not sleep.
With this, you can make “pix in dollars”, so to speak. You can instantly send US currency from your wallet to another, anywhere on the planet. Because of this, there are people around the world who receive their salaries in stablecoins.
It is not surprising, then, that the use of this type of crypto is widespread. In the last 30 days, Tether (USDT) recorded a trading volume of US$6.5 trillion, practically three times more than Bitcoin, which had US$2.2 trillion.
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Brazil also follows this trend. The volume of operations registered with Tether here reached R$16.6 billion in September, according to Federal Revenue data. The value is more than five times that recorded by Bitcoin, which had transactions worth R$3.1 billion in the same period.
Stablecoins have become very popular in countries in economic crisis, which strongly feel the impact of exchange rates and inflation, as is the case in Argentina. “It’s easier to make transfers and payments with stablecoins”, says Bernardo Teixeira, COO of the Argentine crypto platform Ripio.
Stablecoins, however, are much more used in transfers, and not as a means of payment in themselves, as there are few establishments around the world that accept direct payment in digital currency. To use 100 dollars in the form of stable coins at Disney, for example, you will have to exchange your stables for normal dollars – those that “go into” the international debit card. And only then pay for things.
How to buy stablecoins
You need to have an account with an exchange, bank or platform that trades crypto if you want to purchase stablecoins. All the big ones operate some of them, mainly USDT and USDC.
Binance, Coinbase, Kraken, OKX, Mercado Bitcoin, Foxbit, Ripio, as well as platforms such as Mynt (from BTG) and the Nubank app are among those that operate stablecoins. Just open a free account in any of them, deposit reais and choose your preferred crypto.
Advantages of stablecoins
For any exchange transaction with “normal” dollars, there is an IOF charge – 1.1% when converting from real to American currency; another 1.1% on the way back. Additionally, there are fees, which can vary from 0.5% to 2%. On the way there and back.
Meanwhile, stablecoin purchase operations only have the fee for the chosen platform, without IOF. And it is between 0.25% and 1%. On the way there and back too. But the fact is that there will always be some savings at the time of conversion.
Currently, most companies charge fees that vary depending on the volume traded by the investor, with values that decrease as more transactions are made.
Another positive point is that the exchange rate is always very close to that of the commercial dollar – the one whose price appears on Google. In the world of stable coins there is nothing like the “tourism dollar”, the high-value rate for those who buy notes from exchange offices.
Governance and risks
Despite the advantages over other ways of investing in dollars, stablecoins also have their risks, which involve the companies behind the assets.
To be able to maintain parity with the dollar, they need to have a reserve of dollars for each unit of crypto issued. The ballast, as we already said.
The problem is that not all companies are transparent about these reserves, which can generate crises of distrust. Despite being the largest on the market, Tether itself, owner of USDT, has already been involved in controversies on the topic. Today, to show that there is one dollar saved (in the form of American public bonds) for each of the 142 billion USDTs issued, it releases quarterly reports audited by the accounting firm BDO Italia.
Circle’s USDC, in addition to providing reports on its reserves, has its assets in a fund under the custody of the Bank of New York Mellon and managed by BlackRock. This is the guarantee that there is, in fact, one dollar for each of the 40 billion USDCs issued.
A big problem are cryptos that call themselves “stable coins” but have no backing. This was the case, for example, of one called Earth. Its “ballast” was a common crypto, Luna (in an allusion to the gravitational dance between planet Earth and the Moon). An insane formula “guarantees” parity with the dollar based on Luna’s appreciation. When it became clear that none of this made sense, everyone ran to sell their Lands and Moons. The value of both collapsed and half a trillion dollars turned to dust.
Lesson that remains: research whether your preferred stablecoin is backed.
Regulatory risk
In Brazil, another factor begins to become important for investors who use stablecoins. Recently launched a public consultation of the Central Bank on cryptocurrency operations in the foreign exchange market, in a move that could mainly affect stablecoins.
There are still no major details and experts are still evaluating the potential impacts on investors in Brazil, but by forcing companies that operate with stablecoins to have exchange registration, it opens up the possibility of charging IOF or other fees, which could inhibit the domestic market.
Furthermore, a new bill was presented in Congress to regulate the issuance of stablecoins in the country. Author of the proposal, federal deputy Aureo Ribeiro (SD-RJ) told InvestNews that the project does not foresee taxation or increased bureaucracy for stabecoin investors.
“We are going to impact the market, making it offer security to investors. This regulation is fair and we must be attentive to its needs so as not to hamper transactions. Brazil is already at the forefront with cryptocurrencies, and now it will also be at the level of stablecoins,” he said.
