Tuesday, September 27, 2022

Brazil Moves To Legalize Bitcoin Payments

Brazil is looking to pass a bill that will legalize Bitcoin payments. The bill was first introduced to the Brazilian legislature by Federal Deputy Paulo Martins, on June 10. And should the bill be passed, Brazilians may now make Bitcoin payments and settle transactions with other cryptocurrencies as well. Additionally, the bill is also seeking to protect the private keys of holders from being seized by the courts.

Bitcoin Payments To Become Legal, But There’s A Catch 

While the bill wants to make Bitcoin payments legal in Brazil, it should not be mistaken that Bitcoin has now become a legal tender in the region. For what it’s worth, the proposed addition to Article 835 of the Civil Procedure Code expressly states that:

“Crypto asset, is not currency in and of itself, but could be “used as a financial asset, means of exchange or payment…”

Meanwhile, the second portion of the bill also seeks to limit the powers of the Brazilian courts once Bitcoin payment is official. That is, it wants to reduce powers such as freezing exchange accounts, among others.

In line with this, the proposal has now prohibited Brazilian courts from seizing users’ private keys. It states partly that:

“The following rules will be observed: Access, by the Judiciary, to the users’ private key is prohibited.”

What To Expect

At the moment, the proposed additions are yet in the initial phase of discussion. This usually takes place in the Chamber of Deputies of the country’s legislature. So, it might still take a few number of years before the Senate finally approves the additions. After the Senate’s approval, the president may then sign them into law. In the course of doing all these, however, a lot of amendments may yet happen to the bill. 

As of today, only El Salvador and the Central African Republic have granted Bitcoin the status of legal tender. However, Tonga may also soon join the moving train.

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