Crypto Boost: Brazil Residents Can Now Pay Taxes with Crypto

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Brazil’s oldest bank Banco do Brasil has offered crypto enthusiasts a new option to pay taxes using cryptocurrency.
Taxpayers must scan the barcode on the tax bill and convert the selected cryptocurrency.

One of South America’s oldest and largest banks is offering a new and convenient option for taxpayers to settle their dues using cryptocurrencies. The move is expected to increase adoption and ease of crypto use in the country

Thanks to the joint initiative from the Brazilian bank Banco do Brasil and the crypto firm Bitfy it is now “possible” for Brazilian taxpayers to pay their tax bills with crypto.

The service is made available to Brazilians with crypto under the custody of Bitfy, which will act as a “collection partner” for the major Brazilian bank.

The move is expected to expand the use and access to the digital asset ecosystem with “national coverage” while having the comfort of a trustworthy bank providing consumer protection.

Lucas Schoch, Bitfy’s founder, and CEO, added that the “new digital economy is a catalyst for a future full of advantages.”

The bank says crypto and Brazilian real prices will be shown side-by-side when paying with the official currency of Brazil, which should be converted into the chosen cryptocurrency to pay the bill.

Taxpayers will access their tax bill by scanning a barcode, similar to how they pay a “boleto,” meaning ticket, a popular payment method in Brazil.

Last year, Brazil President Jair Bolsonaro passed a crypto regulation bill passed by that country’s Chamber of Deputies and the Senate.

The law establishes a crime of fraud involving virtual assets, with a penalty of between four and six years in jail plus a fine. It also creates a “virtual service provider” license, which is to be requested by digital asset companies, including exchanges and trading intermediaries.

Digital assets that are considered securities, according to the new regulations, will be supervised by the Brazilian Securities and Exchange Commission (CVM).

Temos a honra de anunciar que #Bitfy e @bancodobrasil se juntam para disponibilizar pela 1ª vez na história da economia mundial, o pagamento de #Impostos via #Criptomoedas
Acesse nosso Blog e entenda melhor nossa nova feature de Pagamento de Impostos:https://t.co/UIAe5J3V0N pic.twitter.com/MqPXoCQm5k

— Bitfy (@bitfyapp) February 10, 2023

However, not all crypto investors in Brazil need to declare their trades. The regulator establishes that only investors who trade more than 35,000 reals (around $6,711) in crypto should pay income tax.

Interestingly, the Bank of Brazil is popular for its friendly involvement in the crypto space. In April 2021, BB became the first state-owned bank in Brazil to offer its customers exposure to a crypto exchange-traded fund (ETF).

Last month, one of the world’s largest crypto exchanges – Binance – partnered with Mastercard to launch its first prepaid crypto Mastercard in the country. The card offers a payment option featuring over a dozen fiat currencies and cryptocurrencies, such as Brazilian real, Bitcoin, and BNB, Binance’s native token.