By Michael Scott
Days before exiting the executive office, President Jair Bolsonaro signed the bill passed by the Chamber of Deputies to recognize crypto use in settling payments.
Besides establishing a licensing regime for the crypto service operators, the law classified the majority of digital currencies within the existing definition of the country’s legal payments.
Crypto Law Gazetted
President Bolsonaro’s decision to sign the crypto bill gestures his support for virtual assets adoption. In addition, it fulfills the desire to deliver regulatory clarity before leaving office on December 31.
The December 22 notice captured in the Brazil journal of the federal government confirmed the assent by the president. It revealed that president Bolsonaro signed the 14.478 crypto bill as approved by Brazil’s Chamber of Deputies. The notice recalled that the legislative authority sent the crypto bill for executive approval on November 29 as the pinnacle phase of giving legal recognition to the crypto payments.
Law Designed to Deter Crypto Fraud
A review of the bill’s content rules out conferring cryptos use by Brazilians as alternative legal tender. The new law’s text differs from the El Salvador approach, where it gave Bitcoin a legal tender status.
Besides including virtual currencies in legal payments, the law introduced a special licensing regime for crypto asset service operators. Equally, it referred to the dramatic collapse of Three Arrows Capital, Celsius Networks, Terra Luna, and FTX Group in imposing stiff penalties to deter companies from perpetrating crypto-based fraud.
A notable exclusion from President Bolsonaro’s announcement on December 22 was specifying the federal agency that will supervise the crypto payments as anticipated by the legislative body.
The South American country will likely replicate the US, where virtual assets classified as securities are within the Securities and Exchange Commission. Similarly, Comissão de Valores Mobiliários will assume supervisory duties in crypto payments.
Parliamentarians Perspective of FTX Downfall
The law captures the parliamentarians’ perspective of FTX collapse by compelling crypto exchanges and centralized wallets to separate their company assets from users’ funds.
Meanwhile, the law is scheduled to become effective in June 2023. Crypto advocates have lauded the 180 days to its implementation as sufficient to allow the incoming presidency of Luiz Inácio Lula da Silva to familiarize with the provisions.
Moreover, they express confidence in Lula’s positive sentiments towards virtual assets to signal that his presidency will expedite blockchain and crypto adoption in the country.