A bill has been passed in Brazil to regulate Bitcoin and other cryptocurrencies. The new rules provide clarity for the sector and it is also legally permitted to pay for goods and services with bitcoin. However, it will not be required to accept bitcoin payments.

On Tuesday, the bill was approved by the Brazilian Congress in the capital Brasilia. The bill recognizes digital assets as a representation of value and sets legal frameworks for their use in commerce and payments. It is therefore legally permitted to pay for goods and services with bitcoin

The rules also provide clarity for companies in the sector. That opens the door for Brazilian banks and other financial service providers to offer Bitcoin-based services. Companies that want to offer services related to Bitcoin in Brazil will first have to obtain permission from the regulator.

It is not a recognition of bitcoin as legal tender, as is the case in El Salvador. Although bitcoin payments are allowed, there is no obligation to accept bitcoin.

The bill still has to be signed by the president of Brazil. Once that has happened, supervisors will be appointed. The central bank is expected to become a payment regulator, while the financial markets regulator Comiss??o de Valores Mobili????rios (CMV) will focus on trading and investing.

Some clauses were rejected during the vote. A reduction in taxes on the purchase of mining equipment received insufficient votes. A clause requiring service providers to keep customer funds segregated to avoid a situation like the FTX debacle was also rejected.

Brazil

Bitcoin is relatively popular in Brazil. According to a survey by Triple-A, about 7.8% of Brazilians (16 million people) own cryptocurrencies and in Chainalysis’s Global Crypto Adoption 2022, Brazil ranks seventh.

A number of Brazilian banks have already started offering Bitcoin-related services in the past year: Nubank, Itau Unibanco, XP Investimentos and BTG Pactual – South America’s largest investment bank.

Also worth mentioning are the plans of the mayor of Rio de Janeiro to transform the city into ‘Crypto-Rio’. In January, he announced tax breaks for citizens who pay taxes with bitcoin. He also wants to invest 1% of the municipal treasury in bitcoin. A municipal committee started research in July and drew up an investment policy.