The proposed addition to existing Brazilian law would grant Brazilians the right to use cryptocurrency as a means of payment, protecting their private keys from being seized by the courts.

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Federal Deputy Paulo Martins issued sentence to the legislature on June 10. If passed, the bill would expand both the legal use of cryptocurrencies in Brazil and the powers of the courts to confiscate it.

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A proposed addition to Article 835 of the Code of Civil Procedure states that while crypto assets are not a currency in and of themselves, they can be “used as a financial asset, a medium of exchange or payment, or an instrument of access to goods and services, or an investment.”

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This will not necessarily make Bitcoin or any cryptocurrency legal tender in the country. Instead, cryptocurrency will become a legally recognized financial asset for investment and other purposes.

The broad interpretation of the proposal suggests that a cryptocurrency such as BTC or ETH can be used to pay for goods and services throughout the country. It can also be used to pay off outstanding debts “in the event of an offer or forced restraint” of crypto assets.”

The proposal also discusses new powers and restrictions that Brazilian courts will have once crypto is recognized as a financial asset, such as freezing exchange accounts.

However, this proposal also did not give the court the power to seize users’ private keys.

“The following rules will be respected: access by the judiciary to the private key of users is prohibited.”

The debtor will have to send their cryptocurrency payment to the court’s wallet to ensure it is valid. The proposal does not mention how the court will receive cryptocurrency from self-hosted wallets.

For those who store their cryptocurrency on exchanges, the court will have the power to force “intermediaries” such as exchanges to freeze the debtor’s crypto assets.

“In the event that the debtor’s assets are not discovered, the creditor may require the competent court to issue ex officio by electronic means to intermediaries involved in transactions with crypto-assets so that the assets corresponding to the executed amount are blocked. “.

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The proposed additions are still at the initial stage of discussion in the Chamber of Deputies of the country’s legislature. This means that it may take several years before the amendments are passed by the Senate and signed by the president. By then, they may have changed a lot.

Only El Salvador and the Central African Republic recognize bitcoin as legal tender. Tonga is considering following in their footsteps.