Welcome to Latam Insights Encore, a deep dive into Latin America’s most relevant economic and crypto news from the past week. This edition explores how an unfortunate ruling has brought cryptocurrency closer to being considered money in Brazil, making it seizable for settling debts.
Latam Insights Encore: Crypto Gives a New Step to Become Money in Brazil, Aided by an Unlikely Ally
Brazil appears to take one step forward and one step back regarding crypto, often making progress reluctantly. Last week, we criticized the stance of Brazilian regulators on stablecoins, and now a ruling from one of the highest tribunals benefits crypto, but it feels like a curveball.
Read more: Latam Insights Encore: Brazil Fights a Pointless War Against Stablecoins
Last week, the National High Court of Brazil ruled that crypto could be seized to pay for outstanding debts, withdrawing a previous ruling that established that the search and seizure of digital assets would put the confidentiality of the debtors in jeopardy.
The ruling, although unfortunate for some, has brought crypto’s value and significance to the public eye once more.
This move recognizes cryptocurrency as property, and sets it closer to money than before, as it is now relevant enough to be scrutinized in case of outstanding debt. The feasibility of this happening is another matter, but anyone storing their digital assets in local cryptocurrency exchanges can be reached by a measure of this kind.
Consequentially, this ruling could indirectly help creditors in case of a cryptocurrency scam, given that if the funds linked to these crimes are stored in exchanges, it would be easy to block and seize them. This gives authorities yet another tool to fight the aftermath of crypto crimes, although it is not limited to just that.
Still, there is much left to do in Brazil and the battle still rages on, with crypto actors currently fighting an upcoming rule that would outlaw stablecoin self-custody, potentially disconnecting the country from decentralized finance initiatives.
As I said before, one step forward and one backward.
Read more: Historic: Cryptocurrency Assets Are Now Legally Seizable in Brazil
