The law established a licencing system for virtual asset service providers and included a variety of digital currencies inside the definition of lawful payment methods in Brazil.
The president of Brazil, Jair Bolsonaro, whose term ends on December 31, has signed a bill that makes it possible to use cryptocurrencies like bitcoin and ethereum as a form of payment everywhere in the country.
In a publication dated December 22 that appeared in the official journal of the federal government of Brazil, the office of President Jair Bolsonaro said that the president had signed bill 14.478 into law after it was approved by the country’s Chamber of Deputies. As the last step in the process of recognising crypto payments, the legislative body did its part on November 29 by sending the law to the president’s desk.
According to the language of the bill, inhabitants of Brazil will not be able to use cryptocurrencies like Bitcoin as legal cash in the country, as is the case in El Salvador. This is in contrast to the situation in El Salvador, where people are allowed to do so. On the other hand, the recently enacted law expands the scope of legal payment methods in Brazil to encompass a wide variety of digital currencies. In addition to this, it establishes a licencing system for companies that provide services related to virtual assets and specifies penalties for fraudulent activity involving digital assets.
The announcement made by Bolsonaro did not provide any hints as to which federal entity may be responsible for overseeing crypto payments. On the other hand, similar to the situation in the United States, digital assets that are regarded as securities are brought under the supervision of Brazil’s Securities and Exchange Commission. In addition, the law included requirements that presumably came about as a direct response to the failure of FTX. These regulations required exchanges to differentiate between user assets and business assets.
After a period of 180 days, the cryptocurrency law will become operational, most likely in June 2023. Luiz Inácio Lula da Silva, also known as “Lula,” will become president of Brazil on January 1, 2019, succeeding Jair Bolsonaro, who is expected to step down from office within the next few days. Lula was elected president of Brazil in 2003 and served in that role until 2010. He has expressed support for the use of cryptocurrencies and blockchain technology in the past.