Jair Bolsonaro, Brazil's president, who steps down on 31 December, signed a bill approved by the country's Chamber of Deputies aimed at legalising the use of crypto as a payment method.
The crypto law will take effect in 180 days – in June 2023.
According to the bill, Brazilian residents will not be able to use crypto as legal tender. However, the law includes many digital currencies under the definition of legal payment methods in Brazil. It also establishes a licensing regime for virtual asset service providers and sets penalties for fraud using digital assets.
Furthermore, the bill also includes provisions, likely adopted following the FTX collapse, requiring exchanges to distinguish between customer and company assets.
The announcement did not specify which federal agency could be responsible for overseeing crypto payments. Digital assets are likely to be regulated by the Brazil’s Securities and Exchange Commission.