Brazilian Bill Brings Crypto-Trading Ground Rules

Legalizing the use of crypto as a payment method within Brazil reflects larger ambitions for regional crypto adoption 

President of Brazil, Jair Bolsonaro, has signed into law last week a bill of crypto industry regulations passed by the nation’s Senate and Chamber of Deputies. The bill will take effect likely in June 2023, by which time locally operating crypto companies must adapt to the new rules. 

The bill makes it possible for crypto firms to register in Brazil and establish physical offices, including firms that offer crypto financing services or those that allow for the conversion of crypto assets into national currencies. It will also include provisions requiring exchanges to distinguish between user and company assets, an additive measure directly influenced by the FTX fallout. 

Brazil has been one of the most active countries in the cryptocurrency industry of Latin America. Several banks, brokerage companies, and investment firms in Brazil already offer cryptocurrency custody, investment services, services of token offerings, and cryptocurrency Exchange-Traded Funds.

Crypto leading Latin America’s boom in capital investments

This past year, several Latin American countries have announced or already made certain legislative moves in one way or another aimed at the cryptocurrency industry. The most recent of which, being the signature of Brazil’s new cryptocurrency regulation bill. Greater regulation of the cryptocurrency industry provides greater security to all market participants. 

According to the Association for Private Capital Investment in Latin America, the region registered nearly $6.5 billion in VC investments within the first six months of 2021 (up from the $4 billion registered in 2020 on the whole), with crypto playing a big part in this regional investment surge. 

The underlying legal infrastructure for conducting cryptocurrency-related businesses in the region has proactively made space for more innovative projects to operate, leaving local customers to benefit from added security in industry.

Inflation and cross-border payments fueling crypto growth in the region

Inflation, and remittances have been major drivers for crypto adoption across Latin America in 2022. Exciting examples of progress across many countries have provided a way for people to protect their wealth from inflation and currency instability. 

While cryptocurrency may be seen as a risky and volatile investment in some parts of the world, in Latin America, it is proving to be a valuable tool for financial stability and economic growth. Protection against inflation, and access to financial services make it an attractive alternative to traditional fiat currencies in these economies, helping to create new investment opportunities to stimulate economic growth. 


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