Brazil’s Chamber of Deputies has approved a regulatory enactment that legally recognizes cryptocurrency as a means of payment in the country.
With the law, cryptocurrency will be recognized in the South American country as a means of payment for goods and services. However, this doesn’t give virtual assets legal tender status. Currently, the law awaits the assent of the President of Brazil, Jair Messias Bolsonaro, to become law.
Further, if the bill comes into effect, the executive arm of the Brazilian government will be left to determine the body that will regulate the usage of cryptocurrency for payment. Before now, the Comissão de Valores Mobiliários, the Securities and Exchange Commission of Brazil, was in charge of regulating virtual assets categorized as securities.
The bill defines the mode of operation for cryptocurrency exchanges in the country, including custodial services and the sale of cryptocurrency by registered third parties. Another notable aspect of the law is the provision of tax packages to cryptocurrency mining firms and individuals.
This development might make Brazil attractive to investors and the general cryptocurrency market. The regulation can be regarded as modern due to its structure of keeping up with the prevailing trend in the industry.
The law mandates that cryptocurrency service providers must not mix their funds with that of their users. Notably, the measure aims to prevent investors in Brazil from losing their funds in a situation similar to FTX.
However, the bill didn’t address the issuance of a central bank digital currency (CBDC).
Before the bill, Brazil was prominent in cryptocurrency due to the large scale of the traditional financial institutions that provide cryptocurrency services for their customers. At the moment, Brazil is the country with the most cryptocurrency ETFs in Latin America.
Lastly, the latest Brazil cryptocurrency regulation and adoption as a means of payment differs from El Salvador’s approach to the sector. El Salvador recognizes only BTC as a legal tender, but Brazil’s approach extends to other tokens, though not as legal tender. Likewise, the Brazilian government hasn’t shown any interest in acquiring BTC or other cryptocurrencies.
Recently, Brazil’s cryptocurrency economy has often seen more citizens trading cryptocurrencies, such as Bitcoin, than investing in stocks. Through the recent bill, the country hopes to set the stage for more day-to-day financial transactions to take place.
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Source: Cryptocurrency - investing.com
