Recently, Banco do Brasil, the oldest bank in Brazil, has announced its newest initiative in the space of digital assets. The bank has partnered with a local Brazilian exchange to allow residents to pay their taxes via digital assets.
With this move, the oldest Brazilian bank has placed itself at the forefront of the” new financial technologies.” It embraces modern solutions and provides users access to the latest financial technologies. Adopting crypto tax payments will also bring convenience for users and expand options for the authorities collecting taxes.
Revealing his thoughts, Lucas Schoch, CEO of the Brazilian exchange partnered with the bank, said that the digital economy is the future. In his words:
The new digital economy is a catalyst for a future full of advantages. This partnership makes it possible to expand the use and access to the ecosystem of digital assets with a national scope.
Sources reveal that paying taxes with crypto is straightforward, with the user selecting the crypto asset they intend to pay with. Following that, the conversion to the Brazilian real, the national currency, happens instantly. Also, customers can easily access their tax details by scanning a barcode or entering their tax number and can validate the data before confirming payments.
While the bank’s move is a great step ahead in the digital assets economy, the progressive stance of Brazil towards crypto assets is not a surprise. The nation is one of the most crypto-friendly nations across the globe. As of December last year, the Brazilian president also signed a bill that legalized cryptocurrencies.
The Brazilian authorities had waited a long time for its crypto regulations. In November, Todayq News reported that the bill aimed to control the activities of cryptocurrency exchanges and custody agents while establishing clear mining guidelines. On November 22, the law was to be considered after it was put on hold before the polls on October 20.
Sources reveal that the newly signed law considers several cryptocurrencies as legal payment methods but doesn’t recognize Bitcoin as a legal tender. It also established a licensing regime for crypto companies, stipulated crypto-related crimes, and regulated transactions. The law is set to become effective in June 2023.
The adoption of crypto in Brazil has been growing with every passing day. According to the recent Chainalysis 2022 Global Crypto Adoption Index, the country ranked seventh on the worldwide adoption rate scale. The institutional adoption of crypto has also maintained its pace with the increasing asset adoption. As of August 2022, more than 12,000 companies declared they own crypto assets.
Not just that, according to the reports published by the Brazilian tax authority (RBF) in December, the companies in the country have become more progressive towards adopting crypto as a part of their treasuries. Data suggested that almost 42,000 companies invested in cryptocurrency during October.
The October figures broke September records wherein 40,161 companies had invested in crypto. Interestingly, the number of individuals who purchased crypto during the same period dropped to 1,265,818 from 1.5 million in September.
Brazilian cities also took major steps towards cryptocurrencies in 2022. In October, Rio de Janeiro’s city hall released an order in its Municipal Gazette stating that city officials would work with businesses that specialize in converting crypto assets into fiat currency to enable inhabitants of Rio to pay an IPTU property tax (the Urban Building and Land Tax). Following Rio De Janeiro’s footsteps, Curitiba, another city, proposed accepting crypto taxes, but the authorities pointed out certain shortcomings.