Trending
Crypto
  • BTC
    27365.73 2.15%
  • EUROC
    1.08 -0.15%
  • ETH
    1859.58 2.38%
  • SOL
    19.9 2.36%
  • ADA
    0.37 1.09%
  • AVAX
    14.85 1.09%
  • DOT
    5.4 1.77%
  • LTC
    92.43 1.8%
  • BCH
    116.46 1.4%
  • CRO
    0.06 0.65%
  • MATIC
    0.88 1.7%
  • LINK
    6.58 0.7%
  • XLM
    0.09 0.58%
  • UNI
    5.14 1.28%
  • SHIB
    0 1.02%

More than 215 million people can officially pay with crypto

While Brazil has allowed cryptocurrencies as a form of payment, they haven't been accepted as legal tender just yet.

Many countries and governments are scrutinizing cryptocurrencies after the collapse of several large crypto companies, such as Terra Luna, Three Arrows CapitalFTX, and countless others. However, there is an exception – Brazil – which decided to legalize cryptocurrencies as a method of payment. 

Brazil adopts crypto

Legislators in Brazil have established a comprehensive legislative framework for the trade and use of cryptocurrencies. Voted on Tuesday evening in Brasilia, the nation’s capital, the new regulations acknowledge Bitcoin as a digital representation of value that can be used as a payment method or as an investment asset in Brazil.

Related article: Almost 50,000 BTC bought recently – rally incoming?

However, it’s important to note that the law doesn’t make Bitcoin or any other cryptocurrency legal tender. The measure assigns the executive branch the responsibility of selecting market-oversight agencies for crypto transfers. 

The Central Bank of Brazil (BCB) is expected to oversee the use of Bitcoin as a payment method, while the Securities and Exchange Commission of Brazil (CVM) will oversee its usage as an investment asset. The BCB, CVM, and the Federal Revenue of Brazil (RFB), which is a federal tax authority, assisted legislators in drafting the overhaul legislation.

At its peak, Brazil saw a bigger interest in cryptocurrencies than in the stock market. Now, the country is trying to set up the foundations for this to be used more in everyday financial transactions. This is the first critical step toward long-term crypto adoption. 

However, not everything is favorable for the development of the country’s market, as there was a rejection of a provision that would have reduced some state and federal taxes on Bitcoin mining rigs. In the end, the incentive would only help mining operations that used energy from renewable sources. It was evidently insufficient for approval.

Some new provisions include the regulation of service providers like crypto exchanges. These would have to adhere to particular criteria in order to operate in Brazil from now on.

Also read: S&P 500 can fall much lower per 2008 crisis comparison

The law intends to regulate how Bitcoin service providers in Brazil operate and establish. It will be crucial to identify these businesses as those that offer trading with cryptocurrencies, transfer, custody, administration, or selling on behalf of a third party. 

Lesson learned?

Government authorization will be required for cryptocurrency service providers to operate within Brazil. One specific rule required such businesses to openly differentiate their money from customer capital. The goal here is to prevent occurrences similar to those we recently saw with FTX, in which the client’s funds were commingled with corporate funds.

I got into financial markets by accident in 2012 and started with Forex trading. Later in 2017, I started investing in stocks in cryptocurrencies and began writing articles profess...

Comments

Post has no comment yet.

Want add your comment? Sign up or Sign in