Brazil: signed the crypto law

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Brazilian President Jair Bolsonaro signed the crypto bill, officially recognizing them as a legal payment method in the country.

Brazil: President Approves Crypto Regulation Law

Jair Bolsonaro, president of Brazil in office until December 31, 2022, approved the law on the regulation of cryptocurrencies, recognizing them as a legal means of payment in the country.

Its signing comes after approval by Brazil’s Chamber of Deputies and Senate, and gives companies in the sector 180 days to comply with the new rules.

In the December 22 publication in the Official Gazette of the Brazilian Federal Government, it outlines how digital assets are considered securities and will therefore be supervised by the Brazilian Securities and Exchange Commission (or CVM).

This is not a legal Bitcoin like what is envisioned in El Salvador, but a definition of legal Brazilian payment methods. And indeed, the new regulatory framework establishes the licensing regime for virtual asset service providers and the penalties for fraud using digital assets.

Another unique feature of this new law includes provisions requiring exchanges to distinguish between user assets and company assets.

Brazil formalizes new regulatory framework favoring Bitcoin and crypto

Brazil has been making waves since November over its new regulatory framework for cryptocurrencies.

And indeed, already with the approval of Brazilian lawmakers, it was now clear that the country of Rio Carnival wanted to make things easier for Bitcoin and crypto by including them in the world of traditional finance.

Indeed, the new rules recognize Bitcoin as a digital representation of value that can be used in commerce and as an investment asset, thus defining it as a “virtual asset”.

In this respect, there is no shortage of sanctions, such as the offense of virtual goods fraud, which carries a four to six year prison sentence and a fine. Not only that, at the institutional level, the executive branch is responsible for selecting government bodies to oversee the market.

This law was drafted with the help and support of the Central Bank of Brazil (BCB), the CVM and the Receita Federal do Brasil (RFB).

The record of 12,000 companies owning cryptos

The RFB had revealed a new record in Brazil: 12,053 companies own cryptocurrencies.

Basically, according to data on cryptocurrency disclosures in August 2022 by companies, it seems that more than 12,000 companies (or CNPJs) claimed to own crypto assets, a number the country has never reached before.

This is a 6.1% increase from 11,360 companies in July, making August the month with the highest number of companies holding cryptocurrency holdings.

On the other hand, speaking of the number of individual investors (or CPF), i.e. crypto holders, it seems that during the same summer month, it has decreased compared to July, falling to 1.3 million people. At the same time, there was also a drop in transactions, which stood at $2.1 billion in August compared to $3.4 billion in July.

RFB data then confirmed that in August, the top two crypto assets traded by Brazilians were Bitcoin (BTC) and Tether (USDT), the stablecoin with the highest market cap.

Tether is popular in crypto ATMs in Brazil

SmartPay, starting last November, has been instrumental in expanding Tether in Brazil, placing it in over 24,000 crypto ATMs across Brazil.

The Brazilian company, which offers financial services dedicated to the unbanked (people without bank accounts), allows its citizens to make transfers, withdraw from ATMs, pay bills and buy and sell cryptocurrencies.

Not only that, another target of SmartPay are also Brazilians who live or travel abroad, since their services allow domestic transactions even if they are not physically in the country, such as remittances, namely l money sent home that Brazilians who work abroad usually do.

That said, SmartPay also aims to expand the use of Tether (USDT) after integrating it into its app so that its users can convert USDT to Real by withdrawing banknotes from its physical ATMs.

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