Brazil is no stranger to cryptocurrencies and it’s perhaps no surprise to discover that bitcoin payments will become part of Brazilian real estate next year. The government has just announced an initiative to accept cryptocurrencies as payment for certain taxes including those related to property. Rio de Janeiro will be the city to kickstart the system as early as 2023.
The backstory to crypto in Brazil
Since the advent of cryptocurrencies, Brazil has been one of the countries to experience the most extensive take-up. Crypto usage in Brazil is currently among the highest in the world and it’s estimated that average ownership extends to two cryptocurrencies per person. In addition, cryptocurrencies are regularly used for wages.
In March last year, Brazil became the second country in the world to approve bitcoin ETFs for exchange-traded funds on its stock market. The move brought a regulated environment to cryptocurrencies, already a popular option in the country.
Government takes up cryptocurrencies
Therefore, it was only a matter of time before bitcoin moved to other areas of the Brazilian economy. As a result, the government made its move in mid-April by announcing cryptocurrencies for payments.
By accepting bitcoin as legal tender, the Brazilian government has made a bold innovation in its financial policy. The initiative will start in property, but later move to other areas of the economy such as public transport and tourism.
Crypto for Brazilian real estate
In its first stage as legal tender in Brazil, cryptocurrencies will be used to pay for local council tax, known as Imposto sobre a propriedade predial e territorial urbana (IPTU). And the city to trial the initiative will be the country’s second largest, Rio de Janeiro.
Rio de Janeiro city council will start accepting bitcoin in 2023. The municipality plans to hire companies specialising in converting cryptocurrencies to Brazilian reais to ensure that the city receives full reimbursement for the tax.
Once the acceptance of cryptocurrencies in Rio de Janeiro is consolidated, it will move to other cities in Brazil.
Discover why Brazil makes a safe haven for property investment right now
Solid market for new asset class
According to Pedro Paulo, the Secretary for Finance and Planning in Rio de Janeiro, the city’s goal is “to develop a solid market for this new asset class”. The first step is the real estate tax, but Rio has set its sights on other services too.
In addition, Rio de Janeiro council has plans to accept nonfungible tokens (NFT) governance policies in specific markets. They will include arts, culture and tourism.
(Sources: Forbes, CoinTelegraph)
