Brazil’s Crypto Bill Becomes Law Following President’s Approval 

Brazil’s Crypto Bill Becomes Law Following President’s Approval 

Outgoing President, Jair Bolsonaro, has signed the country’s crypto regulation into law. The bill will recognize certain cryptocurrencies as modes of payment and others as investment products. Brazil has one of the highest cryptocurrency adoption rates in the world.

On Thursday, Brazilian President Jair Bolsonaro, who is set to leave office on December 31, signed the country’s long awaited cryptocurrency regulatory bill into law. The bill was passed by Brazil’s Chamber of Deputies and the Senate in November. 

According to the official journal of the federal government of Brazil, the Chamber of Deputies sent bill 14.478 to the president’s desk for approval on November 29. President Bolsanaro enacted the bill previously passed by the legislative body without any modifications. Contents of the bill suggest that cryptocurrencies like Bitcoin (BTC) will not be considered legal tender in the country, however, they will be recognised as a digital representation of value that can be “negotiated or transferred by electronic means and used for making payments or for investment purposes.” 

The crypto bill, first touted by Deputy Aureo Ribeiro almost seven years ago, directs the executive branch to appoint government bodies to regulate the industry. The Central Bank of Brazil (BCB) is set to be in charge of overseeing cryptocurrencies that are used for payments, while the Brazilian Securities and Exchange Commission (CVM) will supervise digital assets that are considered securities. However, crypto tokens that do not fall under both categories will be overseen by another yet-to-be named federal agency, which is widely expected to be the central bank. 

Brazil’s Crypto Bill Becomes Law Following President’s Approval 

Deputy Ribeiro’s proposed bill was first approved by the Chamber of Deputies back in December 2021, and then sent to the Senate for a vote in April. Here, the document underwent several changes and was returned to the legislative body. Amendments suggested by the Senate required crypto exchanges to segregate customer assets; eliminate taxes on Bitcoin mining operations; and implement a so-called “transition-rule” that would require virtual asset service providers (VASP) operating in the country to comply with rules and regulations immediately upon the bill’s enactment into law. 

Lawmakers outright rejected the Senate’s suggestions last month, highlighting that segregation of tokens could prevent development of the crypto industry in Brazil, and that a designated digital asset regulator will be able to better define rules. According to Brazilian crypto publication Portal do Bitcoin, the segregation issue has been put on hold by the Chamber in order to pass the larger legislation. On November 29, the parliament voted for an approval of opinion from rapporteur Expedito Netto, who was in favour of the bill.

“Today we are voting on a historical matter not only for our country but for the world and Brazil outs itself ahead of the world when debating this issue. I would like to congratulate my friend Aureo Ribeiro who was the proponent of this project,” said Federal Deputy Expedito Netto.

The bill also contains provisions for protecting crypto investors, and anti-money laundering (AML) reforms that will go hand-in-hand with international guidelines. Crypto exchanges, trading intermediaries and mining operators need to obtain a “Virtual Service Provider” licence in order to continue their operations in the Latin American state. Companies will be given 180 days to comply with the new rules. 

Brazil is one the top ranked nations in the world when it comes to cryptocurrency adoption. Having remitted nearly $142.7 billion in crypto transactions between July 2021 and June 2022, the country is ranked first in South America and seventh globally on Chainalysis’ latest Global Crypto Adoption Index. 

At the time of writing, BTC, the world’s largest cryptocurrency by market valuation, is trading at $16,830. 

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