- The proposed legislature adds to Brazil’s existing law-Article 835 of the Civil Procedure Code.
- If the bill becomes a law, it would recognize crypto as a financial asset, a means of exchange or payment, an instrument of access to goods and services and investment in Brazil
- The bill, however doesn’t suggest making crypto legal tender in the country
Brazil Congressman recently proposed an addition to an existing Brazilian law that would grant citizens the right to use cryptocurrency as a means of payment. The Brazil Congressman Federal Deputy Paulo Martins issued the bill proposal acknowledging bitcoin as means of payment to the country’s legislature on 10th June.
Martins presented a descriptive legislative proposal that would add Item 14 to the country’s existing Article 835 of the Civil Procedure Code The new proposal recognises crypto a financial asset, a means of exchange or payment, and an instrument of access to goods and services or investment. The proposed legislation states that crypto could also be used to pay outstanding debts “in the event of offering or forced constriction” of crypto assets.”
Martins states that the legislative proposal is based on the proposals made in the Tax Law by industrial specialists. He adds that the bill exists within the scope of the Center for Tax Studies of the Brazilian higher education institution Fundação Getulio Vargas – its São Paulo law school branch, and the discussions in the project titled “Administrative, Judicial and Tax Enforcement of the 21st century.”
The power the court would enjoy with respect to controlling digital assets is mentioned in rather a cluttered manner in the proposal. The bill states that a debtor would have to send their crypto payment to the court’s wallet to ensure its validity, but it fails to mention how the court would obtain crypto from self-custodied wallets. The bill states that for people that keep their crypto on exchanges, the court would have the power to force “intermediaries” such as exchanges to freeze the debtor’s crypto assets.
Brazil’s Legislators will be discussing the pros and cons of the bill before deciding whether to pass it or not. It might take many years before the proposed additions are passed by the Senate and signed into law by Brazil’s president. If the bill comes into effect, it would further the legal uses of cryptocurrency in Brazil as well as the power the courts posess in confiscating it.
The bill if passed, will not recognize Bitcoin as legal tender in the country but rather acknowledge crypto as a legally recognized financial asset for investments and other uses. The country in an effort to make people more informed about the world of crypto recently organized a training on Bitcoin and Crypto at a summit held by Brazil’s Justice Ministry.