In Brazil, a bill passed on Thursday has sparked positivity on the crypto outlook for the country as cryptos will soon be 100% legal to use as money.
Cryptocurrencies are now recognized as payment methods in Brazil after a new bill approved by Brazilian President Jair Bolsonaro on Dec. 22.
The decision came less than a month after the Parliament passed the bill.
Adoption Boost in Brazil
The new bill, according to the federal government’s official journal (DOU), recognizes cryptocurrency as, “a digital representation of value that can be negotiated or transferred electronically and used for payments or as an investment.”
Brazil has legalized cryptocurrency’s use case as a payment method, however, it doesn’t imply that Bitcoin and other currencies are classified as legal tender. The sign of regulatory approval came by the end of 2021 with a vote on a cryptocurrency bill presented to the House of Representatives.
The two federal agencies – the Central Bank of Brazil (BCB) and Brazil’s Securities and Exchange Commission (CVM) – will oversee the crypto market.
While there has been no official confirmation on the role of each body, it’s likely that the BCB will be in charge of supervising crypto payments and the CVM will hold an account on crypto investment.
Coming Very Soon
The new law will go into effect in 180 days, most likely in June 2023. Bolsonaro is set to step down on Dec. 31, and Luiz Inácio Lula da Silva will take over as president on January 1.
The new bill will possibly establish a regulatory model that helps other countries work on their crypto frameworks. Global leaders have spent years drafting bills to regulate cryptocurrencies.
But most importantly, these policies came with market control, which aims to protect users from scammers taking advantage of the nascent market.
Adoption Up In Latin America
Latin America is currently among the fastest-growing cryptocurrency markets in the world, considered an ideal destination for cryptocurrencies. The motive behind the adoption is the fact that 60% of the Latin American population does not have a bank account.
In addition, political instability, economic crisis with unpredictable changes in inflation and exchange rates, stagnation of the banking system, and financial constraints weakening local currencies have created favorable conditions for the regional development of the digital currency.
Many Latin Americans are looking to cryptocurrency as a tool to protect the value of their assets. The rise of virtual currencies, on the other hand, has caused problems for regional authorities. The adoption wave also paved the way for criminal organizations and individuals.
Many countries have become more open to the idea of cryptocurrency since El Salvador became the first to recognize Bitcoin as a legal currency, but most countries around the world still react with moderation and caution.
Brazil is one of the countries that view digital currencies positively. The government has pursued a policy of virtual currency market development.
After signing a decree allowing the establishment of virtual currency investment funds, President Jair Bolsonaro declared that Bitcoin is the future. Soon after, Rio de Janeiro allowed people to pay their taxes in digital currencies.
The majority of nations, including the United States and Japan, have a neutral perspective on the management and uptake of cryptocurrencies.
These nations do not endorse the use of virtual currencies nor do they prohibit their potentially negative effects; rather, they enact legislation designed to collect taxes and take precautions to monitor and lessen the likelihood of illegal activity such as money laundering or smuggling using virtual currencies.
China has issued stern warnings to its citizens on multiple occasions to steer clear of the digital asset market, and the nation’s authorities strictly regulate the mining of cryptocurrencies like Bitcoin.
The People’s Bank of China put an end to all transactions involving digital currencies in September of 2021 by enacting a complete ban on the practice. Transactions involving bitcoin are deemed illegal in Colombia and Indonesia as well.