An addition to an existing law has been proposed in Brazil. This would allow residents of the country to legally use cryptocurrencies as a means of payment, while protecting their private keys from being taken by the courts.
Use of Cryptos in Brazil could be expanded
The bill is by Paulo Martins submitted† Should it be adopted, the legal use of cryptos in Brazil will expand significantly.
Addition in Article 835
This can be made possible by adding an addition to Article 835 of the Brazilian Code of Civil Procedure. The proposed addition states that while crypto-assets are not currencies in themselves, they can be used as “a financial asset, medium of exchange or payment, or instrument for accessing goods and services or investment”.
It is not necessary to make Bitcoin a crypto legal tender in the country to accept it as a means of payment. However, it must be recognized as a financial asset for investment and other uses. However, the latter is not a huge legislative change, which increases the chance of success.
When interpreted broadly, the proposal suggests that cryptos like Bitcoin (BTC) or Ethereum (ETH) could be used to pay for goods and services across the country. It can also be used to pay outstanding debts “in the event of offering or forced curtailment of crypto assets”.
Protecting private keys
The proposal also aims to better protect users’ private keys. This by the courts in Brazil to take away the right to confiscate such private keys. The following is said about this:
“The following rules will be observed: access by the court to the users’ private key is prohibited.”
A debtor would have to send their crypto payment to the court wallet to guarantee its validity. For those holding their crypto on crypto exchanges, the court would have the power to compel “intermediaries” such as exchanges to freeze the debtor’s crypto assets. The proposal says the following about this:
“In the event that the debtor’s assets are not found, the creditor may request the competent court to issue an ex officio electronic order to the intermediaries involved in crypto-asset transactions so that assets corresponding to the executed amount will be blocked.”
Finally, it is worth mentioning that it is currently only a bill. It is still in the early stages. As a result, it could possibly take years before the proposal is actually passed, if it is approved at all.