Before the onslaught of the recent crypto crash, nations around the world were already looking into regulating Bitcoin (BTC) and other cryptocurrencies in their respective domains. In late April Brazil had decided to approve a bill to regulate the crypto markets in the country.
On Friday, 10th of June 2022, the proposal for additional clauses was made to the nation’s legislature by federal deputy Paulo Martins. If adopted, the law will increase both the permissible applications for Bitcoin and other cryptocurrencies in Brazil as well as the authority granted to the judiciary for their seizure.
As per the addition, Bitcoin and cryptocurrency assets might be utilized as a financial asset, a mode of exchange or payment, a tool for gaining access to goods and services, or a means of investment. This falls under the proposed modification to Article 835 of the Civil Procedure Code.
However, this proposal, if accepted, would not make Bitcoin, or other cryptos, a legal tender, but would instead make the assets legally recognized for investments and other uses. According to a wide interpretation of the proposal, digital currencies like Bitcoin (BTC) or Ether (ETH) may be accepted as payment for products and services all around the nation. In the case that crypto assets are required to be restricted or offered, they might potentially be used to settle existing obligations.
The plan also covers the additional rights and restrictions that Brazilian courts would be accorded after recognizing cryptocurrency as a legitimate financial instrument, such as the ability to freeze exchange accounts.
The plan, however, has refrained from granting the court the authority to collect users’ private keys, that is, the judiciary is not permitted to access a user’s private key. The court would have the authority to order other parties, including exchanges, to freeze the debtor’s cryptocurrency assets if they retain their holdings on exchanges. How the court will collect cryptocurrency from self-custody wallets is not specified in the plan.