Brazil passes law to legalize crypto as a payment method

The law was approved by the Chamber of Deputies of Brazil but still requires the approval of the executive branch to be enacted.

While Brazil has not made Bitcoin (BTC) legal tender as El Salvador did last year, the South-American nation has passed a law that legalizes crypto payments throughout the country. 

The Chamber of Deputies of Brazil, a federal legislative body, has passed a regulatory framework that legalizes the use of cryptocurrencies as a payment method within the country. While this makes significant progress for crypto within Brazil, the law still requires the signature of the president of Brazil for it to be enacted.

The passing of the bill does not make any cryptocurrencies legal tender within the country. However, the bill will include digital currencies and air mileage programs in the definition of payment methods that are under the supervision of the country’s central bank.

After being passed into law, the government’s executive branch must decide which office will be will be in charge of supervision. Still, tokens that will be considered securities will remain under the jurisdiction of the Brazilian Securities and Exchange Commission (CVM).

Apart from designating crypto as a payment method, the law enables the creation of licenses for crypto exchange platforms and for custody and management of crypto by third parties. In addition to this, the law will require exchanges to make a clear distinction between company and user funds, to avoid another incident like the FTX collapse.

Related: UAE regulator revokes FTX license amid the exchange’s collapse

Back in June, a similar proposal was issued to allow Brazilians to use crypto as a means of payment and protect their private keys from being taken by courts. The proposal aims to make crypto assets a means of exchange and an “instrument of access” to goods, services, or investments.

Meanwhile, while the FTX collapse has impacted many sectors within the crypto space, it will not affect everyday crypto use for Brazilians according to Thiago César, the CEO of Transfero Group, which is closely tied to the Brazilian crypto ecosystem.