Brazil's New Law For Crypto Regulation and Payments

Brazil's Congress have approved a new law which, once signed by the President, will legalize cryptocurrency payments and ensure that the industry is regulated by a government-appointed federal agency. The new rules in place will allow for the exchange of virtual assets, cryptocurrency to fiat, and transfers and payments.

According to Reuters, the new law will require exchanges and service providers to have a physical system in place in the country, as well as being obligated to keep their funds separate from their clients funds in order to prevent an FTX-style situation. Those flouting the new rules will face fines and prison sentences, with a short grace period as the law is introduced. The bill does not mention the introduction of a central bank digital currency, though Brazil are currently making headway on the research, development, and eventual issuance of this.

The law has made a point of recognizing that close monitoring of the industry will be an essential aspect of their regulation due to recent scams and fraud relating to digital currency. With that said, Brazilian residents and crypto users have publicly backed the new bill and the 2022 Chainalysis data tells us that Brazil is currently one of the top ten countries for cryptocurrency activity.