Bank Of Brazil Allows Residents To Pay Taxes Using Crypto

Banco do Brasil, a major bank in Brazil, is offering taxpayers a new and easy way to pay taxes using Bitcoin and other crypto assets. According to a February 11 blog post on its official website, Brazil’s oldest bank said the financial development came through a collaboration with Brazil-based cryptocurrency exchange Bitfy.

Thanks to this partnership, Brazilians who own cryptocurrencies in Bitfy can now pay their fees, taxes, and government obligations using their holdings. Crypto users will go through a very simple process that will show tax information along with an amount in Brazil’s official currency, the Real, which will be converted and paid in the chosen cryptocurrency, the statement said.

However, the service’s process is similar to how a customer pays for a “boleto,” meaning a ticket, which is usually done by scanning a barcode in Brazil.

So, with the Bitfy app, taxpayers only need to select their preferred crypto asset and capture the barcode before confirming the payment.

Bitfy’s founder and CEO, Lucas Schoch, said on Friday:

”The new digital economy is the catalyst for a future full of benefits. This partnership allows to expand the use and access to the digital asset ecosystem with national coverage and with the security and trust seal of Banco do Brasil.“

The move came following the Brazilian city of Rio de Janeiro’s accepted digital assets for tax purposes in October 2022. While in December 2022, Brazilian President Jair Bolsonaro signed a bill legalizing the use of cryptocurrencies as a means of payment in the country. 

Brazilian residents cannot use cryptocurrency as legal tender in the country. However, a recently passed law includes many cryptocurrencies as part of Brazil’s legal payments system. Most likely, the measure will come into force in June of this year.

Notably, the Bank of Brazil (BB) showed its friendly participation in the crypto market. In April 2021, BB became the first public bank in the country to offer its clients access to a crypto exchange-traded fund (ETF).

Brazil’s Interest In Crypto

The Federal Republic of Brazil is one of the most popular crypto countries in the world, with policies and regulations designed to promote the acceptance and adoption of cryptocurrencies and other digital assets in the country.

In addition to the Brazilian government, some financial institutions, such as the Bank of Brazil, have shown significant interest in the crypto industry over the past years.

It is worth noting that Brazilian banking institutions offer the largest number of ETFs in Latin America.

According to Federal Revenue data, the statics of crypto investors in Brazil nearly doubled in the third quarter of last year. At the end of September, 1,490,618 taxpayers reported participation in cryptocurrency transactions, compared to 794,981 in the second quarter that ended June 30th.

Due to the growing crypto trend in Brazil, many crypto giants are starting to set foot in the country. Last month, Mastercard and Binance launched a prepaid rewards card in Brazil that encourages citizens to make daily purchases and pay their bills using crypto.

Marcelo Tangioni, Mastercard’s country manager for Brazil, said about Binance’s latest announcement:

“Brazilians are eager to embrace crypto beyond an investment asset.”