A measure to legalize the use of cryptocurrencies as a form of payment in Brazil was approved by Jair Bolsonaro, who will step down as president of that nation on December 31. The law created a licensing system for suppliers of virtual asset services and includes various digital currencies in the list of accepted payment methods in Brazil.
Bolsonaro's office said that the president had signed bill 14.478 into law following endorsement from the nation's Chamber of Deputies in a publication of the federal government of Brazil's official journal on December 22. On November 29, the parliamentary body completed the process of recognizing crypto payments by sending the law to the president's desk.
The bill's wording states that, unlike El Salvador, Brazil would not allow its citizens to utilize cryptocurrencies like Bitcoin as legal cash there. However, the recently approved law defines a number of digital currencies as acceptable payment methods in Brazil. It also provides a licensing system for companies that provide services related to virtual assets and imposes fines for fraud involving digital assets.
The declaration from Bolsonaro made no mention of which government agency may be in charge of overseeing cryptocurrency payments. However, much as in the US, Brazil's Securities and Exchange Commission is responsible for overseeing digital assets that are classified as securities. As a result of the failure of FTX, the law also includes rules mandating exchanges to discriminate between user and corporate assets.
The crypto legislation is expected to go into force in 180 days, or in June 2023. Soon after Bolsonaro leaves office, Luiz Inácio Lula da Silva, also known as "Lula," will take over as president on January 1. From 2003 to 2010, Lula presided over Brazil as president. In the past, he has advocated for the use of blockchain technology and cryptocurrencies.