Jair Bolsonaro, Brazil‘s leaving president, has signed legislation that would make the use of cryptocurrency as a payment method legal in the country.
The president who is slated to leave office on December 31, adopted a crypto regulatory measure just passed by the country’s Chamber of Deputies and Senate on Thursday. The new law creates a crime of fraud involving virtual assets, which carries a penalty of four to six years in prison as well as a fine. The bill also established a license for “virtual service providers,” which will be required of digital asset enterprises such as exchanges and trading intermediaries. Bloomberg was the first to report the news.
According to the bill’s content, Brazilians will not be able to utilize cryptocurrency such as Bitcoin as legal tender, as they may in El Salvador. However, the recently passed bill includes numerous digital currencies in the list of acceptable payment methods in the country. The administration of Bolsonaro also does not specify which deferral agency will be in charge of overseeing Bitcoin payments.
Digital assets are considered securities in Brazil, as they are in the United States, and thus fall under the jurisdiction of the Securities and Exchange Commission. The measure also includes regulations devised in response to the collapse of FTX, such as requiring crypto exchanges to explicitly differentiate between user and business assets.
Companies have 180 days to adjust to the new regulations proposed in the bill after it is approved on Thursday. Bolsonaro will be succeeded as president on January 1, 2023, by Luiz Inacio Lula da Silva, who will take over from him. Bolsonaro won’t be in office to witness the implementation of the new crypto law.
