Oldest Brazilian Bank to Collect Taxes in Cryptocurrency

• Banco do Brasil says users can now pay taxes in cryptocurrency
• The President of Brazil signed a law legalizing bitcoin payments in the country

Banco do Brasil eases the methods of paying taxes, and now authorizes the user to pay their taxes in the form of cryptocurrencies. Is it a way to legalize the usage of cryptocurrencies in the country?

According to Banco do Brasil’s statement published on February 11, 2023, it is now “possible” for tax paying citizens to pay their bills with crypto in collaboration with Bitfy, a Brazil-based crypto firm.

All the taxes and bills will be collected by Bitfy, which will act as a “collection partner” for Banco do Brasil. In its announcement, the bank noted that “in addition to the convenience it offers to customers, it can “expand” the use and reach of the digital asset ecosystem with “national coverage” with the comfort of a reputable bank providing consumer protection.”  

The Chief Executive Officer and Founder of Bitfy said, “the new digital economy is a catalyst for a future full of advantages.” As per the notification, crypto enthusiasts may experience an uncomplicated process with tax details displayed along with the number of reals, the official currency of Brazil, which is supposed to be converted into a preferred crypto asset to pay the bill.     

To pay the tax, the user needs to scan a barcode similar to “Boleto,” a payment method in Brazil. The introduction of barcode services aims to ease the payment process.   

Earlier in October 2022, Rio de Janeiro announced that it has started accepting cryptocurrencies as a mode of payment for paying taxes. 

On December 22, 2022, the President of Brazil, Jair Bolsonaro, reportedly signed a complete regulatory framework for bitcoin trading as a mode of payment in the country. The bill is now ready to pose expecting the  new law to go into effect in 180 days from the date of sanction.     

Congress has already approved the bill and did not make any changes. The newly enacted laws do not make any cryptocurrency, including bitcoin as, a legal tender. Instead it said earlier to consider bitcoin as a digital representation of value being used as a payment and investment.

In the second week of December 2022, Crypto.com,-  a leading cryptocurrency exchange ,disclosed that it has received the regulatory approval for its EMI license in Brazil. 

Interestingly, Crypto.com is the only crypto exchange that has secured a Payment Institution license in Brazil. However, the most recent approval the exchange won other than Brazil was in France as a Digital Asset Service Provider under the supervision of AMF (Autorité des marchés financiers). 

Brazil has been steadily expanding its borders to establish a framework for regulating cryptocurrencies without fail. Cryptocurrency can be an alternative to fiat currency, but it cannot replace the importance of traditional money. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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