06-16-2022 icon

Brazil Proposes Bill to Qualify Crypto as Legal Financial Instrument

By Lucy Adegbe

A member of the chamber of deputies of Brazil, Paulo Eduardo Martins handed out a proposal to the nation’s legislative body on June 10. If the act gets approved, the legal use of cryptocurrency would be enhanced alongside the capacity of the courts in impounding it. 

The addition to the already existing bill on Item 835 of the Civil Procedure Codes asserts that, although crypto properties may not be a banknote by its very nature, it could function “as a financial asset, means of exchange or payment, or instrument of access to goods and services or investment.” 

It doesn’t exactly point out bitcoin as its official currency like other notes issued by the bank but as a valid financial asset for certain transaction motives.

An in-depth translation of the proposed addition implies that crypto coins such as Bitcoin, and Ether could work as a payment method for acquiring goods and services in the region. It could also be accepted in the payment of debts.

The proposed bill also points out the restrictions, as well as the adjusted authority that the Brazilian legal body would have on crypto assets once legalized, like suspending trade accounts. 

According to the proposal, “The following rules will be observed: Access, by the judiciary, to the user’s private key is prohibited.”

Borrowers would need to get their crypto payment validated by the court. Additionally, the court would be bestowed with the authority to compel exchanges to suspend the funds of identified debtors using their platforms. 

The additional proposition is yet to be passed from the preliminary debate stage. This implies that it could take a long time before it is signed into law by the President.