Brazil Passes Bitcoin Payments Bill – Bitcoin Magazine

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Brazilian President Jair Bolsonaro on Thursday morning signed a bill that establishes a comprehensive regulatory framework for the trading and use of bitcoin in the country, according to the Official Gazette of the Federal Government (DOU).

President Bolsonaro signed into law the bill approved by Congress without any changes. As noted earlier, the new rules recognize bitcoin as a digital representation of value that can be used as a means of payment and as an investment asset in the South American nation.

A virtual asset is “a digital representation of value that can be traded or transferred electronically and used for payments or as an investment,” according to the text of the bill.

The new law, which takes effect 180 days after today’s signing, does not make bitcoin or any cryptocurrency legal tender in the country. Nonetheless, the legitimacy conferred on the use case of BTC as a payment is significant and has the potential to spur greater activity in the country. The extent to which this occurs, however, depends on the actions of the responsible regulator.

The executive branch will select the government bodies that will oversee the market. The Central Bank of Brazil (BCB) is expected to be responsible when bitcoin is used as a means of payment, while the country’s Securities and Exchange Commission (CVM) will be the watchdog when it is used as an investment asset. The BCB and CVM, as well as the Federal Revenue Authority (RFB), assisted lawmakers in drafting the overhaul legislation.

If the BCB is confirmed as the watchdog of the sector, the outlook is not the best. Although the regulator cannot overrule the aforementioned definition of a legally determined virtual asset, there is little reason to believe that the BCB will do its utmost to push for greater adoption of bitcoin as a form of payment. . Its president, Roberto Campos Neto, has repeatedly stated that he doesn’t see cryptocurrencies as a great alternative to fiat payments, citing volatility primarily. More importantly, the BCB is working on releasing its own digital currency, Real Digital, which is currently scheduled to go live by 2024.

But the greater regulatory clarity provided by the legislation is prompting companies to explore the burgeoning payment method more closely. This, in turn, may result in more widespread adoption of bitcoin as a medium of exchange in Brazil, whether or not there is active endorsement by the BCB.

Read a detailed breakdown of the legislation here.

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