Brazilian President Approves New Crypto Laws Recognizing Bitcoin Payments

Brazilian President Jair Bolsonaro has officially sanctioned the new regulations, which provide a complete regulatory framework for using and delivering virtual asset services in the country. 

The bill signed Thursday was initially proposed by the country’s Chambers of Duties and Senate earlier this year before it was later approved by Brazilian lawmakers last month without modifications. President Bolsonaro has welcomed the bill into law. 

Bitcoin Recognized As Medium of Exchange

While the new legislation is still ineffective until 180 days from today, it only applies to virtual assets recognized as non-security tokens.  Cryptocurrency traders in Brazil can now use Bitcoin (BTC)  for payments of services. 

The bill greenlights virtual assets, which can be transferred among parties through electronic means to be used as payment options or for investment purposes. 

The bill expects the Central Bank of Brazil (BCB) to be the primary custodian when BTC is used for payments. At the same time, the country’s Securities and Exchange Commission (CVM) oversees the assets when they’re used for investment. 

“For this Law, a digital representation of a value that can be traded or transferred by electronic means and used to make payments or for investment purposes is considered a virtual asset, not including national currency and foreign currencies,” reads the press release. 

While the rules may have adopted BTC for payments, it is essential to note that digital assets are still not identified as legal tender in Brazil. 

Operate with Prior Authorization

The bill encourages businesses offering crypto-related goods and services to legally operate in the country by obtaining regulatory approvals from the appropriate authorities before entering the Brazilian market. 

However, digital asset service providers must observe some regulatory guidelines such as free enterprise and free competition, good governance practices, transparency in operations and risk-based approach, and protection and defense of consumers’ interests and users’ information before legally operating in the country. 

Aside from promoting safe practices among business owners, the bill allows the executive branch of the federal Public Administration of the South American country to choose which cryptocurrencies to regulate. 

The federal authorities will also appoint suitable government bodies or entities to police its crypto market.