What does Brazil's push to adopt cryptocurrencies mean?

If passed, the measure will provide the complete legal and regulatory framework affecting cryptocurrency businesses, merchants who accept cryptocurrencies, investors and crypto-wallet holders who use digital currencies to pay for goods and services.

This would ostensibly accelerate the acceptance of cryptocurrencies in the largest of the South American countries, where politicians are still playing catch-up with the fast-paced, booming cryptocurrency industry. Earlier this year, Rio de Janeiro became the first Brazilian municipality to accept bitcoin for tax purposes.

Many Central American countries are also scrambling to incorporate cryptocurrencies into their economic and legal frameworks. While El Salvador is known for its President Nayib Bukele's all-out push to accept bitcoin as legal cash in the country, lawmakers and business giants in Mexico, Cuba and Honduras are all racing to get in on the action.

Costs and Benefits

The legalization and increased regulation of cryptocurrencies bodes well for greater mass acceptance if cryptocurrencies exist outside of the law and only in cyberspace where the code is the law. This will certainly lead to a large influx of cash, as well as new monthly active users acquiring and using cryptocurrencies as funds for payments and financing.

However, while legal regulation of business will inevitably create some of the challenges that blockchain aims to address, it will also accelerate the mainstreaming of blockchain

Among the issues are increased government influence over the monetary system and the use of finance by governments as a means of control, exclusion, and even oppression, just as they have historically done with fiat currencies created by central banks in the regulated traditional banking industry.

The bottom line for crypto investors and business owners

While institutionalized and regulated crypto businesses will exist at a broader and deeper level of this ecosystem, there will be new opportunities for investment contrarians, disruptors, and risk takers seeking amazing ROI, such as Bitcoin has returned to early investors. Many of these opportunities will be found in the DeFi blockchain and Layer 2 infrastructure.