Brazil's leading cryptocurrency and fintech industry organizations warned that extending the Financial Transaction Tax (IOF) to stablecoin transactions could stifle innovation and violate existing laws. In a joint statement, associations representing over 850 companies pointed out that under Brazil's 2022 Virtual Assets Law, stablecoins are not classified as domestic or foreign legal tender, making such tax expansion illegal without legislative approval. They cautioned that policy missteps could damage Brazil's rapidly growing cryptocurrency market, which processes an estimated 6 to 8 billion dollars in monthly trading volume, with 90% coming from stablecoin transactions.