According to the federal government’s official website, Brazilian President Jair Bolsonaro signed a new bill on Thursday morning regarding crypto. This law creates a comprehensive regulatory framework for the trading and usage of Bitcoin (BTC) in the country.
Brazil adopts Bitcoin
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Bitcoin in Brazil can be held as an investment asset under the new regulations. The bill defines Bitcoin as a digital representation of value that can be negotiated or transferred electronically and utilized for payments or as an investment.
However, Bitcoin and other cryptocurrencies are not recognized as legal tender under the new law, which takes effect 180 days from today’s signature. Nevertheless, the validation of Bitcoin’s payment use case is significant and may lead to increased activity in the country.
The executive branch will be in charge of choosing the regulatory agencies that will keep an eye on the crypto market. When used as a medium of exchange, BTC will likely fall under the purview of Brazil’s Central Bank (BCB), while the country’s Securities and Exchange Commission (CVM) will keep a close eye on its investment-related activities.
Since the legislation already defines virtual assets as described above, there’s no reason to think the BCB will go out of its way to promote Bitcoin’s use as currency. As expected, no central bank would probably promote cryptocurrencies because they will promote Central Bank Digital Currencies, or CBDCs, their own products.
The president of BCB, Roberto Campos Neto, has made it clear that he does not consider cryptocurrencies to be a viable alternative to fiat payments due to their extreme volatility. But the BCB’s primary focus is on launching its own digital currency, the Real Digital, which is expected to enter circulation in 2024.
However, because of the legislation’s increased regulatory clarity, companies are more likely to investigate the developing payment option. Whether or not the BCB formally endorses Bitcoin, this trend may lead to greater acceptance of BTC in Brazil as a means of payment.
This is exactly what most people have been waiting for. If the right regulation of cryptocurrencies will be set in motion everywhere in the world, the wild west era might be over. And it might be considered “normal” to use cryptocurrencies, instead of looking at them as a fraudulent or malicious tools, as viewed by most regulators and governments.