Brazil Joins the Legal Bitcoin Party

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All around the world, countries are starting to realize the huge potential Bitcoin has as means of payment. Not just Bitcoin, but all other cryptos too. The small island country of El Salvador did it first, followed by the Central African Republic, many states, and some cities like Lugano in Switzerland. It’s fair to say that things are taking a turn for the better, as now Brazil is joining that list after previously having thoughts about it.

Although he lost the last presidential elections, Jair Bolsonaro is still Brazil’s president. He’ll remain in the seat until January 1st, the date when new president Luiz Inacio Lula da Silva takes the reins again. Until then, Bolsonaro can sign laws as he sees fit, and one of the latest ones was a smart move. By approving a bill into law which was confirmed by the federal government’s official journal, Bitcoin is now a means of payment and investment in Brazil.

‘Digital Representation of Value’

By the bill’s words, Bitcoin is a digital representation of value. As such, it can be used for payments in Brazil and as an investment asset. The new law will go into effect 180 days from Bolsonaro’s signature. But, contrary to popular belief, it won’t make cryptocurrencies or Bitcoin legal in the country. As a matter of fact, it only allows crypto payments, with a potential to grow into something more in the future.

President Jair Bolsonaro has seen his fair share of negative publicity in the past. He signed controversial bills into laws and was criticized for his stern ruling that almost touched on dictatorship. However, this time he did the right thing, recognizing Bitcoin as a valuable payment and investment asset that will surely help Brazil’s financial troubles in the long run.

While it’s not legal tender by any means, this is the next best thing. Now, all that remains is for the executives to choose the government bodies that will oversee the market. Thanks to the new law, Bitcoin payments won’t be illegal anymore. It’s no secret that Brazil is a big market for Bitcoin, and while its residents have been doing everything illegally in the past, they don’t need to look over their shoulders ever again.

Who Becomes the Watchdog?

Most experts believe that the Central Bank will be in charge. The country’s securities and exchange commission will act as a watchdog, which is more or less the same as in the USA. The law was crafted with experts from the BCB, CVM, and RFV – the federal tax authority, who have yet to agree on any taxes and how transactions will be completed.

There are still six months to go before the new law starts to function. The good news is that it gives businesses a shot to try Bitcoin, which will lead to even wider adoption in the South American country. It remains to be seen what kind of effect it will have on the country’s financial troubles, with many experts expecting a positive outcome.

December 28, 2022: • No Comments

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