Government expands incentives for Bitcoin mining in Brazil until 2028

Although it accounts for only 0.375% of global Bitcoin mining, Brazil has just received a significant boost from the federal government. The public administration expanded the import tax exemption for equipment used in cryptocurrency mining, extending the benefit until January 31, 2028. The measure was formalized by the Foreign Trade Chamber’s Executive Management Committee (GECEX) and signed by Vice President Geraldo Alckmin, covering 29 different product categories exempted from taxes beyond mining equipment.

The decision comes at a strategic moment. While countries like Paraguay (4% of the global hashrate) are advancing as mining hubs in South America, Brazil is still seeking to solidify its position in the sector. The extension of this fiscal policy clearly aims to increase the country’s competitiveness in this expanding market.

High-efficiency ASICs: the equipment that gains exemption

The tax benefit specifically covers ASIC machines, devices designed exclusively for mining cryptocurrencies that use the SHA-256 algorithm, such as Bitcoin and Bitcoin Cash. These machines operate with sophisticated mathematical protocols that define how these cryptocurrencies are created and validated on the network.

To qualify for tax exemption, equipment must meet strict technical criteria. Energy efficiency must be below 20 joules per terahash, measured at 35 degrees Celsius, while processing capacity must exceed 200 terahashes per second. Practically, this means only modern, high-performance machines can benefit from the exemption.

The resolution took effect one week after its official publication. However, it’s important to note that the exemption applies only to registered importers, not to individuals purchasing products via postal orders. The government had already zeroed these taxes in 2025, but the benefit was initially scheduled to expire in November 2027. Now, with the extension, the deadline is pushed two additional months.

Mining in Brazil remains marginal on the global stage

To understand the context of Bitcoin mining worldwide, just look at the hashrate figures released by Hashrate Index. The United States dominates the sector with 37.5% of blocks produced on the network, a position that continues to widen its lead. Russia ranks second with 16.4%, while China maintains 11.7% — impressive considering that activity is officially banned in the country.

In contrast, Brazil contributes only 0.375% of the global computational power dedicated to mining. This percentage is close to neighboring countries like Argentina (0.328%), Bolivia (0.235%), and Venezuela (0.469%), indicating that Brazil does not differ significantly from its regional peers. Paraguay stands out as an exception in South America, leading the continent with 4% of the global hashrate — more than ten times Brazil’s contribution.

Why Brazil faces challenges in cryptocurrency mining

Despite the recently expanded tax exemption, structural limitations remain significant barriers to growth in Brazil’s mining sector. The high cost of electricity continues to be the main obstacle. While countries with cheaper energy — particularly those with abundant geothermal or hydroelectric resources — enjoy competitive advantages, Brazil struggles with high tariffs.

Another critical factor is the tropical climate. Mining machines generate intense heat during operation, requiring sophisticated cooling systems to maintain efficiency. In hot regions, these cooling costs increase exponentially, reducing miners’ profit margins.

The tax exemption addresses only part of the puzzle. While it lowers the entry barrier for new operators by eliminating import taxes, it cannot neutralize the challenges posed by expensive energy and the need for intensive cooling. For Bitcoin mining to truly take off in Brazil, complementary approaches are needed: more competitive energy policies, investments in cooling infrastructure, and possibly partnerships with regions that have lower operational costs.