Cryptocurrencies, also known as Virtual asset service providers, must obtain licenses under the law, which includes many digital currencies as legal payment methods.
As part of his plan, Brazilian President Jair Bolsonaro signed a bill to legalize cryptocurrencies as a means of payment within the country on December 31.
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The President’s office said on December 22 that the country’s Chamber of Deputies had approved bill 14.478, which was signed into law by Bolsonaro. The legislative body’s final step was recognizing cryptocurrency payments on November 29 when the bill was sent to the President’s desk.
According to the bill’s text, Bitcoin will not be legal tender in Brazil, as it is in El Salvador. Digital currencies, however, are included in Brazil’s definition of legal payment methods under the newly passed law. A licensing regime is also established for virtual asset service providers and penalties for fraud involving virtual assets.
Bolsonaro’s announcement should have mentioned an agency responsible for crypto payments.
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Similar to the Securities and Exchange Commission in the United States, the Securities and Exchange Commission regulates digital assets in Brazil. Additionally, the law required exchanges to distinguish between users’ and companies’ assets, likely in response to the collapse of FTX.
180 days from now – likely in June 2023 – the crypto law will go into effect. Bolsonaro will step down in a few days, and Lula da Silva, also known as “Lula,” will assume the presidency. In the past, Lula has endorsed crypto and blockchain adoption in his remarks as the President of Brazil from 2003 to 2010.