It seems a new bill was proposed in Brazil by Federal Deputy Paulo Martins to make cryptocurrency payments legal in the country.
The bill is an amendment to an already existing Brazilian law. The new addition will allow Brazilians to utilize cryptocurrency as a form of payment while also shielding their private keys from being taken by the courts.
The proposal states that while crypto assets, is not currency in and of itself, it could be “used as a financial asset, means of exchange or payment, or instrument of access to goods and services or investment.”
This means that cryptocurrency could be used to pay for products and services across Brazil. It could also be used to pay outstanding debts “in the event of offering or forced constrictionof crypto assets.”
The bill also covers the rights and restrictions that Brazilian courts will have once cryptocurrency is acknowledged as a financial asset, such as the ability to freeze exchange accounts.
The proposal does not grant the court the authority to seize users’ private keys. “The following rules will be observed: Access, by the Judiciary, to the users’ private key is prohibited,” the proposal notes.
To ensure the payment’s authenticity, the debtor would have to transmit it to the court’s wallet. The proposal is vague on how the court would get cryptocurrency from the self-custodied wallets.
The court would have the authority to order intermediaries such as exchanges to freeze the debtor’s crypto assets if they retain their crypto on exchanges.
The new proposal is currently under discussion at the Chamber of Deputies. This means that the Senate may take their sweet time to pass the amendments and the Brazilian president to sign them into law.
However, if the proposed law gets passed, it would broaden both the legal uses of cryptocurrencies in Brazil as well as the ability of courts to seize it.
The bill does not make cryptocurrency like Bitcoin a legal tender in the country. It would make crypto a legally recognised financial instrument that could be used for investments and other purposes.
In April, the Brazilian Senate passed the crypto regulation bill which is also under discussion in the Chamber of Deputies. The bill states that local crypto providers should be allowed to operate in Brazil.
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