Residents of Brazil can now lawfully conduct transactions within the country using cryptocurrency.

This major change came into effect after Brazil’s leadership signed a crypto policy authorizing various digital assets as a legal payment method.

Bolsonaro Gives His Signature

On Thursday, the president of Brazil, Jair Bolsonaro gave the thumbs up for bill 14.478 to enter into law. Of course, Bolsonaro’s approval was only after the policy had successfully gone through the Chamber of Deputies and the Senate. The president who is set to step down from his position by Dec 31 received the crypto policy on Nov 29 and subsequently enacted it with no modifications. The bill describes a virtual asset as follows:

A digital representation of value that can be negotiated or transferred electronically and used for payments or as an investment.” 

Following the new bill, several cryptocurrencies can now be considered a legitimate means of payment within the nation. Unlike Central American El Salvador, however, Brazil’s crypto adoption does not deem any cryptocurrencies legal tender. Instead, it creates a regulatory structure under which crypto businesses can obtain official permits to operate.

CVM in Charge of Securities 

Crypto-focused entities including exchange platforms and other middlemen must now request Brazil’s “virtual service provider” license. The nation’s new crypto policy also lays down the penalty for crypto fraud. This ranges from 4 to 6 years of incarceration as well as a fine. 

The bill did not explicitly state which of the nation’s authorities will be responsible for overseeing crypto operations. Interestingly, Brazil does shadow the United States when it comes to crypto assets that qualify as securities. Notably, the digital assets in question fall beneath the jurisdiction of the country’s Securities and Exchange Commission (CVM).

FTX Collapse May Have Aided the Bill

The crypto policy remained in talks within Congress for seven years before finally making its way to the president’s desk. However, significant developments within the local and broader crypto markets reportedly hastened its progress.

One such event was the collapse of major exchange platform FTX. Conspicuously, the bill features clauses that gently nod at FTX’s historic crash. For one thing, Brazil requires exchanges to keep customer funds and company assets entirely separate. 

Brazilian authorities will call for compliance from crypto businesses in roughly 6 months, possibly in June next year. By then the nation’s new president Luiz Inácio Lula da Silva, or just “Lula,” will be in office. Lula will step into his role as president on Jan 1, 2023, for his second stint as the nation’s head.

Of note, Lula has been the president of Brazil since the beginning of 2003. His time in office has been decidedly marked by his positive sentiments about the crypto and blockchain space. 

 

The post Brazil Legalizes Crypto as a Payment Option appeared first on Crypto Adventure.

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Filed under: Bitcoin - @ December 23, 2022 1:00 am