Brazilian lawmakers approve bill governing use of Bitcoin as payment

A comprehensive regulatory framework for the use and trading of cryptocurrencies in Brazil has been adopted by the country’s parliament. A new regulation approved Tuesday evening in the country’s capital, Brasilia, recognizes Bitcoin as a digital representation of value that can be used as a means of payment and investment in the country.

The bill covers a wide range of what is called “virtual assets,” and currently all that is required to become law is a presidential signature. The country does not currently recognize Bitcoin or any other cryptocurrency as legal cash.

The use of Bitcoin as payment is now governed under the comprehensive legal framework for cryptocurrencies adopted by the Brazilian legislators.

The executive branch is responsible in the bill for choosing the bodies that regulate the market. The Central Bank of Brazil (BCB) is expected to take responsibility when using Bitcoin as a payment method, while the country’s Securities and Exchange Commission (CVM) is expected to take responsibility when using it as a type of investment asset. increase. The Federal Tax Service (RFB), BCB, and CVM all contributed to the overhaul law.

In Brazil, where the cryptocurrency sector is thriving, we sometimes see more people trading cryptocurrencies such as Bitcoin than investing in stocks. The country now aims to create the conditions for converting it into increased regular use in financial transactions.

However, not all texts are conducive to growing the country’s market. The defeat of a provision seeking to cut some state and federal taxes on the purchase of bitcoin mining equipment was a major oversight in Tuesday’s vote. applied and this was very restrictive but seemed insufficient for approval.

Regulations for service providers such as exchanges who must comply with certain standards in order to do business in Brazil is one of the additional regulations. By defining such organizations as those that trade, transfer, store, manage, or sell Bitcoin on behalf of third parties, the law seeks to regulate the establishment and operation of Bitcoin service providers in Brazil. is. Providers of cryptocurrency services are only allowed to operate in the country with formal federal consent.

One rule sought to force such businesses to make a clear distinction between their own assets and those of their customers. This clause is intended to prevent users’ funds from being mixed with the business’s cash, as we saw earlier with FTX, and to assist in the recovery of user assets in the event of bankruptcy. On Tuesday, it lost the vote.

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