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Brazil Just Caused A Bitcoin Pump

Joey Sendz

Joey Sendz

Brazil Bitcoin Law Jesus Statue

Although Brazil did not declare Bitcoin to be legal currency, it took the next best action by allowing cryptocurrencies as a form of payment nationwide. This gave the ecosystem’s growth and acceptance of digital currencies a legislative boost.

A legislative framework allowing the use of cryptocurrencies as a form of payment in Brazil was adopted by the Chamber of Deputies.

The agreement—signed under the designation PL 4401/2021—allows for the inclusion of digital money and frequent flyer miles (often referred to as “miles”) in the definition of “payment arrangements” subject to the control of the nation’s Central Bank.

Junior Punk NFTMag Contributor

The law, which has already been adopted and just needs the President of the Republic’s signature to become effective, provides cryptocurrency payments for goods and services legal standing, but does not elevate them to the level of legal cash.

Brazil has advanced significantly in terms of investor acceptance and regulation of cryptocurrencies. The majority of the country’s main banks and brokers presently provide some form of exposure to cryptocurrency investments or comparable services like custody or token offers, and it currently has the most cryptocurrency ETFs in Latin America. Even Ita, one of the biggest private banks in Brazil, is attempting to tokenize assets as a component of its upcoming suite of services for investors.

The entity or institution in charge of overseeing the subject will be decided by the executive part of the government (the president and its ministers) when the legislation is put into effect; only tokens classified as securities fall within the purview of the CVM, Brazil’s version of the SEC.


Brazilian President Bolsonaro (Middle)
Brazilian President Bolsonaro (Middle)

The CVM and the nation’s own Central Bank have been the government organizations most active in the field up until this point. The law also specifies guidelines for how bitcoin exchange platforms should run as well as for the storage and management of cryptocurrencies by reputable third parties.

Despite the fact that the legislation is silent on the subject, the nation has already taken substantial strides toward the issuing of a central bank digital currency.

To avoid a situation similar to FTX, where the exchange utilized its clients’ cash for its own financial activities, one of the most crucial components of the rule requires service providers to keep their own funds separate from those of their consumers.

The bill eliminated a clause that would have given tax breaks to cryptocurrency miners and called for “tighter oversight” of the sector, acknowledging that the anonymity of digital currencies enabled illegal activity.

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