Brazil’s Legislature Legalizes Crypto as Official Payment Method

The legislative arm of Brazil’s government has approved the use of cryptocurrencies as a payment method, signaling yet another positive step for a country that is becoming increasingly pro-crypto. 

Crypto Payments for Everyone 

Earlier this week, the Chamber of Deputies, Brazil’s legislative arm, passed a regulatory framework designed to legalize the use of digital assets as a payment method in the country. 

The bill is a landmark one, allowing individuals and businesses to use cryptocurrencies to process everyday payments in one of South America’s largest economies. 

For clarity, the bill’s passing doesn’t make cryptocurrencies legal tender in Brazil. Instead, it includes digital currencies as part of approved payment methods that Brazil’s central bank will oversee. 

Besides designating crypto as a payment method, the law will also enable the creation of licenses for exchange platforms that hope to provide asset custody and management for clients. 

In addition, exchanges will be required to mark a clear distinction between company funds and user deposits, with the Brazilian government looking to avoid instances such as the FTX implosion. 

As it stands, the bill has passed Brazil’s legislative body and will now head to the office of the President to be ratified under the law. After being passed into law, the President will also be tasked with deciding which regulatory body will supervise the bill. For now, all tokens considered securities would remain within the purview of the Brazilian Securities and Exchange Commission (CVM).

It will be interesting to see how the bill’s final signing will play out, especially considering that Brazil is in a bit of a transition at the moment. The country had its General Presidential Elections last year, with former President Luiz Inácio Lula da Silva returning to power after defeating incumbent Jair Bolsonaro in one of the country’s tightest presidential contests.

While Bolsonaro and his supporters have made efforts to undermine the election and foment doubt in the result of last month’s polls, Lula appears poised to resume office once the current President’s term is over. 

The incoming head of state hasn’t made any public comments on crypto and blockchain yet. However, he reportedly said recently that the growing industry would need the “attention” of regulators going forward. 

If the new bill isn’t signed into law before Bolsonaro bows out of office, there is no saying whether Lula will be willing to take it over the goal line just yet. 

Brazil’s Impressive Adoption Spree Continues 

The new bill underscores what has been quite an impressive year for crypto adoption in Brazil. So far, the country has stepped up adoption on several fronts. Just last month, the city of Rio de Janeiro started allowing citizens to make property tax payments in crypto along with fiat. 

The new tax regime will allow more than one coin to be accepted for payments, and the city has also confirmed plans to expand crypto support for other forms of taxes in the future. 

Support for crypto in Brazil’s private sector is also at an all-time high. As of August, a figure released by the Federal Revenue of Brazil showed that 12,053 unique organizations had crypto on their balance sheets, a 6.1% surge from the numbers recorded just a month earlier. 

As the country continues down its crypto-friendly path, it isn’t much of a surprise to see that crypto payments are getting more popular and that the government itself is willing to incorporate digital assets into the economy.