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Brazilian President Signs Crypto Law

Brazilian President Signs Crypto Law

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Jair Bolsonaro, the President of Brazil who is set to leave office on December 31, has signed a bill aimed at legalizing the use of crypto as a payment method within the country.

In a Dec. 22 release of the Official Gazette of Brazil’s federal government, Bolsonaro’s office said the president signed Bill 14,478 after approval by the country’s Chamber of Deputies. Lawmakers sent the bill to the president’s desk on Nov. 29 as the final step toward recognizing crypto payments.

According to the text of the bill, Brazilian residents will not be able to use cryptocurrencies like Bitcoin (BTC) as legal tender in the country, as is the case in El Salvador. However, the newly passed law included many digital currencies under the definition of legal payment methods in Brazil. It also introduced a licensing system for virtual asset service providers and established penalties for digital asset fraud.

Bolsonaro’s announcement did not hint at which federal agency might be in charge of overseeing crypto payments. However, as in the United States, digital assets that qualify as securities fall under the regulatory umbrella of the Brazilian Securities and Exchange Commission. The law also included provisions, likely made in response to the collapse of FTX, that required exchanges to distinguish between user and corporate assets.

Related: Brazil could cement its status as an economic leader thanks to the 2024 CBDC move

The crypto law will come into force in 180 days – probably in June 2023. Bolsonaro is scheduled to step down in a few days, after which Luiz Inácio Lula da Silva, or simply “Lula”, will take over the presidency on January 1st. Lula served as President of Brazil from 2003 to 2010 and has previously advocated for crypto and blockchain adoption.

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