Brazil and Cryptocurrency
Brazil Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
Is cryptocurrency legal in Brazil?
Brazil has not currently enacted regulations or legislation specifically regulating cryptocurrency. Nonetheless, existing legal and regulatory structures provide guidance with respect to cryptocurrencies.
Virtual currencies do not currently fall under the definition of legal currency under Brazilian law. Under the Decree-Law 857-69 and Law 10192/01, the Brazilian real is the country’s legal currency. Cryptocurrencies are generally considered assets under the general Civil Code regime. See Law 10406/02.
Initial Coin Offerings–at least those that intrinsically take on the functional characteristics of a security–may be subject to the Capital Markets Law and the Brazilian Securities Exchange Commission (CVM) regulatory framework. As such, offerings may be subject to CVM Ruling 400/03 and/or other CVM guidance.
Currently, Brazilian law does not provide for an anti-money laundering regime specific to virtual currencies. However, the existing Anti-Money Laundering Law like extends to virtual currencies in a number of contexts.
Brazilian Tax Law
Brazilian tax law does not currently provide for cryptocurrency-specific provisions. However, Brazilian tax authorities provide guidance in the for of Q&As, which require that virtual currencies must be declared in income tax statements and capital gains derived from the sale of virtual currencies are subject to income tax.
The Brazilian government has expressed concerns over the risks posed by cryptocurrencies. In late 2017, for example, the Brazilian Federal Reserve Bank (Banco Central do Brasil) issued Notice No. 31,379 alerting citizens to the risks arising from the custody and trading operations of virtual currencies. The notice stated in part as follows:
Considering the growing interest of the economic agents (society and institutions) in so-called virtual currencies, the Brazilian Federal Reserve Bank warns that these are neither issued nor guaranteed by any monetary authority, so they have no guarantee of conversion to sovereign currencies, nor are they backed in real assets of any kind, being the entire risk of the holders.
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4. Companies that negotiate or keep so-called virtual currencies on behalf of users, natural persons or legal entities are not regulated, authorized, or supervised by the Brazilian Federal Reserve Bank. There is no specific regulation on virtual currencies in the legal and regulatory framework related to the National Financial System. The Brazilian Federal Reserve Bank, in particular, does not regulate or supervise operations with virtual currencies.
5. So-called virtual currency is not to be confused with the definition of electronic money referred to in Law 12,865 of October 9, 2013, and its regulation by means of normative acts issued by the Brazilian Federal Reserve Bank, according to the guidelines of the National Monetary Council. . . . . 
In late 2020, Brazilian lawmakers proposed legislation that would regulate cryptocurrencies and provide for a series of laws governing business use of cryptocurrencies.
Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
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 Banco Central do Brasil, Comunicado No. 31.379, de 16 de Novembro de 2017, http://www.bcb.gov.br/pre/ normativos/busca/normativo.asp?numero=31379&tipo=Comunicado&data=16/11/2017, archived at https://perma.cc/G4GM-8HV6(translation by author).