Brazil Debates Bill To Protect Debtors’ Digital Assets
Brazilian lawmakers make moves to include cryptocurrencies in the list of debtors-protected assets on behalf of creditors following their recognition as tradable property.
In recent months, Brazil has embarked on a major change to reduce the seizures of debtors’ assets which is meant to settle their creditors.
Originally, Bill number 4.420/2021 being debated by the Constitution, Justice and Citizenship Committee of the parliament does not include digital assets but a separate move is looking to include the asset class into the protection list.
The country wants to amend the Code of Civil Procedure specifically the mode of debt enforcement and the rights of both parties. The proposed amendment will protect the financial savings of debtors to a figure equal to 40 minimum wages from seizures on behalf of creditors.
On September 15, Deputy Felipe Francischini disclosed an agreement to include digital assets as part of the protected asset class after a suggestion from Deputy Fernando Marangoni.
“Nowadays, people’s investment behavior has changed, with the traditional savings account losing ground to other forms of financial investment.”
This latest development comes as a result of the directive given to the county’s Central Bank by the President to regulate digital assets and its issuing firms.
🔥 The President of #Brazil Jair Bolsonaro signed a bill making #bitcoin (BTC) and other cryptoassets a legal and regulated payment option in the country – and this move, an expert says, "sets the stage for greater bitcoin adoption."— Cryptonews.com (@cryptonews) December 23, 2022
Read more 👇https://t.co/leZWzMVyvZ
The law ushered in a digital asset framework in the country as it became an emerging market for web3 in South America.
The laws referred to crypto as “digital representations of value that can be traded or transferred via electronic means and used for making payments or investments.”
Brazil’s pro-crypto stance yields fruits
In recent years, Brazil has maintained a positive attitude toward the industry leading to an influx of blockchain-based firms and a growing number of asset adoptions in the country.
According to the Federal Revenue Service, Brazil records about 3.2 million crypto users and has over 89,000 businesses that utilize crypto assets. The country also ranks high in crypto awareness statistics worldwide.
Brazil plays host to Mercado Bitcoin, one of the biggest virtual asset exchanges in South America, and has given out licenses to Crypto.com, Coinbase, etc.
Coinbase recently listed Brazil among foreign jurisdictions it considers as an attractive investment destination because of its friendly and certain regulations.
Despite the positive developments, policy watchers have flagged the recent moves to raise the taxes on crypto held overseas as a bad light for the country’s growth.
Many view this as the effect of supporting cryptocurrencies as taxes on virtual assets have been added to the Finance laws of Nigeria and other countries.