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Brazilian Bitcoin Legal

If it receives the thumbs up from the Chamber of Deputies this week, then Brazil seems to be following El Salvador`s lead and making Bitcoin legal. The real has been the fiat currency in Brazil since 1994 and is exclusively legal tender. Although cryptocurrencies and other similar virtual assets can be used privately as alternative payment methods, they are classified as goods or movable property. Cryptoassets were first defined in May 2019 when the Secretaria Especial da Receita Federal do Brasil (“RFB”) issued a normative decision (Instrução Normativa) to introduce reporting requirements for transactions involving such assets.1 In line with concerns regarding the regulation of financial supervision, Bills Nos. 3.825/19 and 3.949/19 were introduced to establish the legal framework for crypto exchanges. and similar platforms. introducing compliance procedures and operating licences to be issued by BCB (except in specially defined exceptional cases). Bill No. 3,825/19 also criminalizes the unauthorized mediation of these exchanges and platforms as crimes against the national financial system and is subject to the provisions of civil, administrative and criminal law provided for in consumer protection laws.

Virtual currencies do not currently fall under the definition of legal tender in Brazilian law. According to Legislative Decree 857-69 and Law 10192/01, the Brazilian real is the legal tender of the country. Cryptocurrencies are generally considered assets under the General Civil Code. See Law 10406/02. Is cryptocurrency legal in Brazil? Do you have questions about cryptocurrency, digital currencies or blockchain technology? Freeman Law can help you with digital currencies, tax planning and tax compliance. Contact us now to schedule a consultation, or call (214) 984-3410 to discuss your concerns regarding cryptocurrency and blockchain technology. Abreu also noted that regulatory clarity would help reduce crimes related to crypto assets. “The intention of the project is to curb or limit illegal practices such as money laundering, tax evasion and many other crimes. There is a market that is legal and legal, which makes up the vast majority of that market, but there are exceptions. Most jurisdictions and authorities have yet to enact laws for cryptocurrencies, which means that for most countries, the legality of crypto mining remains unclear.

However, Aureo noted that the market is still not regulated and as such it does not offer legal recognition. The implementation of crypto regulation in Brazil would result in Latin America`s largest country joining other countries in the region, establishing clear guidelines and rules for the emerging asset class. El Salvador was the first country in the world to recognize bitcoin as legal tender in September 2021, even giving citizens $30 in bitcoin to download its national digital wallet. Meanwhile, Cuba announced last year that it plans to recognize and regulate cryptocurrencies like Bitcoin, citing “reasons of socio-economic interest.” Federal MP Paulo Martins sent the proposal to the country`s legislature on Friday. If passed, the law would expand both the legal use of cryptocurrency in Brazil and the power of the courts to confiscate. The bill was approved by the Brazilian Senate in April and aims to regulate cryptocurrency exchanges by creating a single regulator to solve the problem. In the same way, the project legalizes cryptocurrency mining and establishes tax exemption rules for mining institutions that present green projects with 100% renewable energy for the establishment of mining farms. The proposed law will not necessarily make cryptocurrency legal in the country, but it will at least be a legally recognized financial asset for investment and other purposes. According to the normative decision of RFB No.

1.888/19 a crypto asset is the “digital representation of value in its own unit of account, the price of which can be expressed in local or foreign currency, traded electronically using distributed cryptography and recording technologies, used as a form of investment, value transfer instrument or access to services, and is not recognized as currency”.2 It also defines crypto exchanges as “legal entities, are or are not involved in financial activities, provide services related to cryptoasset transactions, including brokerage, trading or custody, and who may accept any means of payment, including other crypto assets. »; 4. Companies that trade or hold so-called virtual currencies on behalf of users, natural or legal persons are not regulated, authorized or supervised by the Brazilian Federal Reserve.