Brazil President Signs Bill Regulating Use of Bitcoin As Payment
The President of Brazil has approved a comprehensive regulatory framework for crypto, which regulates the use of bitcoin as a payment method.
Thursday morning, Brazilian President Jair Bolsonaro signed into law a measure that sets a comprehensive legal framework for the trade and usage of bitcoin in the nation, according to the official journal of the federal government.
Without alteration, President Bolsonaro signed the measure passed by Congress into law. As previously reported, the new regulations recognise bitcoin as a digital representation of value that may be used as a payment method and an investment instrument in the South American country.
The wording of the law defines a virtual asset as “a digital representation of value that may be electronically traded or transferred and utilised for payments or as an investment.”
The new legislation, which takes effect 180 days after today’s signing, does not make bitcoin or any other cryptocurrency legal cash in the United States. Regardless, the legitimacy granted to BTC’s use case as payment is significant and has the ability to stimulate further activity in the nation. However, the amount to which this occurs depends on the activities of the responsible regulator.
The executive branch will choose the regulatory agencies for the market. 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 and CVM, as well as the federal tax authority (RFB), assisted legislators in drafting the reform legislation.
If the BCB is certified as the industry’s regulator, the prognosis is bleak. Although the regulator cannot overrule the law’s definition of a virtual asset, there is no reason to assume that the BCB will go out of its way to promote the widespread acceptance of bitcoin as a payment method.
Roberto Campos Neto, the company’s president, has said numerous times that he does not see cryptocurrencies as a viable alternative to fiat payments, noting primarily their volatility. Importantly, the BCB is now planning the launch of its own digital currency, the Real Digital, in 2024.
But the legislation’s increased legal clarity encourages firms to investigate the new payment option more carefully. This, in turn, may result in a greater acceptance of bitcoin as a means of trade in Brazil, regardless of whether the BCB endorses it actively or not.