Brazil Passes Bill To Recognize Bitcoin and Digital Assets as Payment

According to Brazil’s federal government’s official journal (DOU), President Jair Bolsonaro signed a bill into law on December 22nd that creates a comprehensive regulatory framework for Bitcoin transactions in the country.

The bill was passed by Congress in November and was enacted today by President Bolsonaro without any changes. The new regulations acknowledge Bitcoin as a digital representation of value that can be used in the South American country as a means of payment and as an investment instrument.

The bill defines a virtual asset as “a digital representation of value that can be negotiated or transferred electronically and used for payments or as an investment.”

The new law takes effect 180 days from the day it is signed, but does not declare Bitcoin or other cryptocurrencies as legal tender within the country.

The government agencies in charge of regulating the market will be chosen by the executive branch. The Central Bank of Brazil (BCB) is anticipated to oversee all activity when Bitcoin is used as a form of payment, while the Securities and Exchange Commission (CVM) of the nation will be involved when Bitcoin is used as an investment asset. The federal tax authority (RFB), the BCB, and the CVM all contributed to the development of the bill.

Increased regulatory clarity for Bitcoin and cryptocurrencies in Brazil incentivizes companies to expand their payment options. Regardless of whether the BCB actively endorses Bitcoin or not, this could lead to more widespread use of Bitcoin as a form of exchange in Brazil.