Brazil Passes Crypto Payments Law

Brazil Passes Crypto Payments Law

It is always a source of excitement in the crypto industry when a new law is passed that pushes adoption. Whether it is crypto being recognized by the government of a country, tax regulation, or anything else, laws that could benefit the industry are always welcome. 

Now, crypto lovers in Brazil have a reason to celebrate as its President  Jair Bolsonaro has signed a new law that recognizes Bitcoin as a form of payment and could act as a stepping stone for even more crypto adoption in the country. This was announced on December 22, 2022, and follows its initial approval from the Chamber of Deputies. 

Crypto in Brazil 

With a massive population that is very tech-forward, Brazil represents fertile ground for the crypto industry. Now, this fertile ground can be explored thanks to this new law which will go into effect in 180 days. 

“For the purposes of this Law, a digital representation of value that can be traded or transferred by electronic means and used to make payments or for investment purposes is considered a virtual asset,” the law says, essentially setting a foundation for the industry to operate within Brazil.

But while this is certainly a cause for celebration, the official document also stipulates some terms and conditions for the use of crypto. For example, virtual asset service providers can only operate in the country with authorization from a regulatory body. The document also makes mention of crypto-related crimes and the punishment for them.

Not only will crypto crimes carry up to 8 years in prison but the punishment for repeat offenders was also stipulated. 

“The penalty will be increased from 1/3 (one third) to 2/3 (two thirds) if the crimes defined in this Law are committed repeatedly, through a criminal organization or through the use of virtual assets,” the document says. 

This comes at a time when both those within and outside of the crypto industry are on high alert regarding crime. From the anxiety following the FTX collapse to the concern about crypto’s use for crime, both regulators and crypto users want to be sure that investors will be protected.

But regardless of all that, this move is a major milestone in the progress of crypto. Many countries around the world have been reluctant to pass pro-crypto laws but having a country like Brazil take such a bold step could trigger more of these. 

The Price of Adoption

It is truly remarkable to see where the crypto industry has gone since its inception and in terms of adoption, we can expect to see more of this, especially in Latin America given this development from Brazil.

The foundation of all of these, of course, will be pro-crypto laws that allow crypto businesses to operate with ease and crypto consumers to use their tokens as easily as they do fiat. And while crypto is not yet legal tender in Brazil as it is in places like El Salvador, it could be well on its way.

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