Martins’ proposal has already been introduced in parliament. His proposal would amend Article 835 of the Brazilian Civil Procedure Code. In addition, the policy would state that cryptocurrency is not recognized as a currency. They can, however, be used to make payments.
Such transactions can take place on exchanges, as an investment vehicle, or as a means of payment for goods and services. The proposal might well make digital assets suitable for investment as well as other types of financial transactions.
According to Martins, this policy amendment proposal would give the nation’s legal system more authority over cryptos. For example, using exchanges, courts can seize a debtor’s digital assets.
Wherever possible, courts can settle debts by selling digital assets.
According to the proposal, “a creditor may seek the court’s intervention to seize their debtor’s digital content if they cannot find any tangible assets they can hold for such debts.” The court’s order can be issued ex-officio, electronically, or through symmetric encryption intermediaries. As a result, only assets equivalent to the debt amounts are seized.”
However, the proposal clarifies that courts cannot seize users’ non-custodial private wallet keys forcibly. The proposal is also being debated in the chamber of deputies. The debate, however, is still very much in early stages.
It could take several years for any changes or legislation to be enacted. The fact that it is the only current crypto-related proposal in Brazilian legislation may hasten the change.
Brazil’s Crypto Ecosystem
Brazil’s financial policies have been altered to accommodate cryptocurrency. Legislators approved a proposal two months ago to regulate the digital asset industry.
The bill, however, is still awaiting the approval of the country’s president. The president will also form a board of directors to oversee the cryptocurrency industry. “Digital currencies sources of essential that can be transferred or traded electronically,” according to the bill.
Brazil’s Senate recently approved a new crypto proposal that seeks to tax all crypto-related transactions. Several controversies accompanied the bill’s passage. The bill is controversial because it states that crypto-to-fiat transactions will be taxed as well.
Brazil has been investigating the possibility of establishing a national digital currency. The country’s central bank is collaborating with leading cryptocurrency players to improve and test the program.
The Stellar Experimental Testing and Mercado Bitcoin are two of these players (the biggest crypto exchange in the country). However, the Brazilian central bank clarified that now the CBDC platform would not replace Pix, its mobile app platform.
According to Bloomberg data, Pix has much more than 150 million users. The apex has not yet revealed a timetable for the CBDC launch pilot test. According to various data, Brazil’s crypto industry is one of the quickest in Latin America.