Brazilian President Passes Cryptocurrency Bill Into Law

The president of Brazil, Jair Bolsonaro, whose term ends on December 31, has signed a measure that makes it possible to use cryptocurrencies like bitcoin and ethereum as a form of payment everywhere in the country.

Bolsonaro’s office claimed in a Dec. 22 edition of the official journal of the federal government of Brazil that the president had signed bill 14.478 into law after ratification by the country’s Chamber of Deputies. On Nov. 29, the parliamentary body forwarded the law to the president’s desk as the last step towards recognising cryptocurrency payments.

According to the bill’s wording, inhabitants of Brazil will not be allowed to utilise cryptocurrencies such as Bitcoin as legal cash in the nation, as is the situation in El Salvador. However, the recently approved legislation includes various digital currencies among the authorised payment options in Brazil. It also provides a licensing scheme for virtual asset service providers and imposes penalties for digital asset fraud.

Bolsonaro’s remarks made no mention of which government agency may be in charge of overseeing cryptocurrency payments. However, like in the United States, digital assets classified as securities are regulated by Brazil’s Securities and Exchange Commission. The legislation also includes restrictions, most likely enacted in reaction to FTX’s demise, mandating exchanges to differentiate between user and corporation assets.

The cryptocurrency legislation will go into effect in 180 days, most likely in June 2023. Bolsonaro is set to depart office in a few days, and Luiz Inácio Lula da Silva, or simply “Lula,” will take over as president on January 1. Lula was Brazil’s president from 2003 to 2010 and has previously spoken out in support of crypto and blockchain adoption.

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