Do you want to be able to pay for goods, bills, and even debts with crypto? Soon, Brazil may allow you to do just that. A bill presented in Brazil proposes crypto-assets such as bitcoin being included as a means of payment. If passed, it will simplify the payment process for crypto holders and allow firms to accept crypto payments for business. It will also be a massive push for the industry internationally.
What is the Bill?
The bill was introduced in the Brazilian Congress by Federal Deputy Paolo Martins. It is an addition to existing laws that would expand the options available to crypto owners, while also increasing the power of the court.
This is an expansion of Article 835 of the Civil Procedure Code. If the bill is accepted, then crypto-assets would not be treated as a currency, but would rather be “used as a financial asset, means of exchange or payment, or instrument of access to goods and services or investment.”
This raises the question, “Is crypto legal?” In short, crypto will not be legal tender. However, crypto will be a recognised financial asset for investments or payments. It may also be used to pay outstanding debts when demanded by courts.
The bill also expands the powers of the judiciary. Like other financial instruments, crypto-assets can also be frozen. If someone defaults on a debt, courts can coordinate with intermediaries to freeze their crypto up to the amount due. These intermediaries may be crypto exchanges or those that offer wallet services. It is unclear how this will work with self-custody wallets.
The courts also have one important limitation outlined. They cannot seize a user’s private keys. Thus, they have the power to freeze assets but not to access wallets held by individuals.
While this is promising for the future of crypto, it may be many years before this bill is put into practice. As it is still being discussed, there may be many changes before it becomes a law. The bill is currently being discussed in the Brazilian Senate. After clearing this, it must also be approved by the Chamber of Deputies before being signed into law by the president.
Brazil’s History with Crypto
In April, the Senate of Brazil approved the Crypto Law Project. This project seeks to clarify crypto regulations and protect individuals from crypto scams. It is the result of combining several different law projects surrounding crypto.
The bill establishes clear definitions for crypto assets and virtual asset service providers. It also promotes overseeing these concepts by a designated institution. While the bill does not delve into NFTs, it does create an amendment to the penal code. This creates a new law against “fraud in the provision of services of virtual assets, securities, or financial assets.” The law would allow for imprisonment for 2 to 6 years along with fines.
In March, another initiative by the city of Rio de Janeiro caught investors’ attention. The Mayor of Rio announced that real estate tax in the city can be paid using crypto from 2023 onwards. This was an effort to have official initiatives that recognise the crypto market.
All in all, the future of the crypto market in Brazil looks promising. The development of regulatory and legal bodies around the world pushes crypto-assets to the forefront of finance. Recognition of crypto-assets through different laws in Brazil indicates support for a thriving industry.