Brazil Welcomes new Crypto Law with President’s Approval
- The President of Brazil, Jair Bolsonaro, has officially signed off the national crypto law on Thursday.
- The law was passed by the Congress and Bolsonaro signed it without suggesting changes.
- The legislature will include principles governing the trading and investment in Bitcoin (BTC).
- After 180 days of the signature of the President of the country, the law will go into affect.
Many countries have taken massive steps to increase their presence in the crypto industry recently, following the example of El Salvador, the first country to adopt Bitcoin (BTC) as legal tender last year. One of the regions that has become increasingly crypto-friendly is Brazil, the largest country in both South America and Latin America with a population exceeding 217 million people.
The President of Brazil, Jair Bolsonaro, has officially signed off on the national crypto law, which will be followed by crypto investors and firms in the country. According to the federal government’s official journal (DOU), the law will include principles governing the trading and investment in the world’s oldest and biggest cryptocurrency, Bitcoin (BTC). Additionally, Bolsonaro signed the bill passed by Congress on Thursday without suggesting any modifications.
The new crypto regulation bill in Brazil defines a virtual asset as “a digital representation of value that can be negotiated or transferred electronically and used for payments or as an investment.” Additionally, it is also crucial to note that the law will go into effect 180 days after the signature of the President of the country and does not recognize Bitcoin or any other crypto coin in the market as a legal tender.
However, the regulation of the oldest cryptocurrency and other coins might increase the usage of blockchain-based digital assets in the country and even lead to further integration of BTC in the country’s payment infrastructure. Although this growth might be hindered if the regulatory authority in charge of regulating the crypto industry of Brazil is skeptical of crypto, which could be a case due to the collapse of multi-billion dollar crypto exchange FTX.
The executive branch of the government will be responsible for selecting the government agency responsible for regulation of crypto assets, and it is likely to be the Central Bank of Brazil (BCB). Furthermore, it is possible that the BCB will be in charge of cases when Bitcoin is used for payment purposes, while the country’s securities and exchange commission (CVM) would be responsible when BTC or other crypto coins are used for investment purposes.
The BCB and the CVM, along with the federal tax authority (RFB), help the government create the legislation for the regulation of crypto assets. Interestingly, if the central bank is chosen as the regulator of virtual assets in Brazil, it is unlikely that the authority will go out of its way to promote the adoption of blockchain and crypto payments in the region.
On the other hand, the president of BCB, Roberto Campos Neto, has stated multiple times that he does not see cryptocurrencies as a better alternative to fiat payments, citing the volatility of crypto assets as the reason for the same. As reported earlier, the Brazilian Securities and Exchange Commission is working to reform the nation’s legislative system to better regulate cryptocurrencies.