Brazil’s outgoing president, Jair Bolsonaro, has signed a bill that will legalize the use of cryptocurrencies as a payment method in the country.
Jair Bolsonaro, the president of Brazil who is set to leave office on December 31, on Thursday approved a crypto regulation bill that was recently passed by the country’s Chamber of Deputies and the Senate. The new law establishes a crime of fraud involving virtual assets that will come with a penalty of anywhere between four and six years in prison and will further include a fine. The bill also created a “virtual service provider” license, which will be required by digital asset firms, including exchanges and trading intermediaries. The news was first reported by Bloomberg.
The bill’s text explains that Brazilians will not be able to use crypto such as Bitcoin as legal tender like in El Salvador. The newly passed bill does however include various digital currencies under the definition of legal payment methods within the country. Bolsonaro’s administration does also not indicate which deferral agency would oversee supervising cryptocurrency payments. Digital assets, like in the U.S., are deemed to be securities, and therefore fall under the purview of Brazil’s Securities and Exchange Commission. The bill also includes provisions that have been developed in response to the collapse of FTX and requires crypto exchanges to clearly distinguish between user and company assets.
Following its approval on Thursday, companies have 180 days to adapt to the new rules put forward in the bill. Bolsonaro will not be in the office to see the new crypto law take effect and will be replaced by Luiz Inácio Lula da Silva who will take over as president as of January 1, 2023.
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