Brazil’s Superior Court came up with a big verdict. First, Brazil makes the news by launching the much-awaited crypto ETF.
Now, the Brazilian Superior Court of Justice has passed another landmark judgment. According to the judges’ panel, independent judges can now order asset recovery, freezing any private crypto wallet.
Previously the Securities Exchange of Brazil was handling the crypto-related decisions only. Now, the court can also partake in decision-making. The process will be the same as freezing traditional assets.
According to a coverage by The Cryptopolitan, “crypto assets are not legal tenders.” However the court can still order them to be considered as a payment form.
As crypto is becoming a major element in the financial scale of Brazil’s economy, this decision was imminent.
Are There Any Risks Ahead?
The main risk is that there are no specific regulations to handle discrepancies in the crypto handling during the sell-offs. So, the actual asset recovery process, through crypto sales remains a clouded zone yet!
In the whole Latin zone, Brazil is only second in terms of crypto usage. Almost all retail and institutional sectors are billing in crypto now in Brazil. So far so, that US companies like Binance have acquired licenses to operate as a local platform in Brazil.
Red Flags!
There are a few critical red flags that investors in Brazil must be warned about. Firstly, Brazil has put a ban on stablecoin transactions using self custodial wallets.
It could directly affect a lot of centralized platforms. Making peer-to-peer lending and exchange and other decentralized activities unchallenged.
At the same time, Itaú Unibanco is planning to launch a stablecoin, native to the Brazilian economy. Meanwhile, the US central bank has also planned a similar move. America could introduce a completely dollar-backed stablecoin any day.
The centralization can reduce the asset value of crypto coins in Brazil. We’ll wait to see how this move turns out!
