Brazilian President Jair Bolsonaro has signed a bill creating crypto payment regulations.
Bolsonaro made no modifications to the bill approved by Congress before signing it into law on Thursday (Dec. 22), according to multiple reports published Thursday, including Nasdaq.
The new law is to go into effect in 180 days, according to the report. The regulatory framework included in the new law legalizes the use of cryptocurrencies as a payment method within Brazil.
It also creates a new category of crime, “fraud involving virtual assets,” and mandates the creation of a “virtual service provider” license.
In addition, the law says crypto assets considered securities will be regulated by the Brazilian Securities and Exchange Commission (CVM), while other digital assets will be governed by another body appointed by the executive branch, such as the country’s central bank.
The law does not make crypto legal tender in Brazil but does move the country closer to a wider embrace of digital currencies.
The approval of the legislation by lawmakers in November, and now the signing into law by the president, came as crypto advocates in Brazil have been calling for more oversight in the wake of the collapse of the crypto exchange FTX.
The bill was approved by Brazil’s senate earlier this year but, while needing to go through the lower chamber of the country’s legislature, sat “kind of dormant” during Brazil’s recent election, Roberto Dagnoni, an executive at Mercado Bitcoin, told Reuters Nov. 17.
However, the bill gained new urgency following the multibillion-dollar implosion of FTX, Dagnoni said at the time.
“The rules that currently exist have not been applicable to some players, so they can do whatever you want … This [law] would change a lot,” Dagnoni said Nov. 17, before the bill was signed into law.
When the bill was approved by the Senate’s economic affairs committee on Feb. 22, Sen. Iraja Abreu, who backed the bill, told Bloomberg that the legislation would establish a favorable environment for more regular crypto use.
“With regulation, cryptocurrency will become even more popular,” Abreu said at the time. “Once this regulation is approved, the trend is that it will be increasingly adopted in the supermarket, in commerce, in a car dealership.”