Brazil's capital Rio De Janeiro will allow residents to pay real estate tax in Bitcoin

The administration of Rio De Janeiro, the capital city of Brazil, has announced a move to formally accept payments made via Bitcoin towards urban real estate taxes. The move is a part of the city’s pro-cryptocurrency taxation laws, which according to reports will come into action from 2023.

Noting the move, Changpeng Zhao, chief executive of cryptocurrency exchange Binance, tweeted that the company had made a “handshake deal” towards initiating formal acceptance of Bitcoin in the city some time ago, a move that has now been formalised. Going forward, Binance will now set-up an office in the city.

The official announcement made by the office of Rio de Janeiro mayor Eduardo Paes said, “To enable the operation, the municipality will hire companies specialised in converting crypto assets into reais (the Brazilian currency). In this way, the City Hall will receive 100% of the amount in the currency.”

“We will stimulate the circulation of cryptocurrencies by integrating them into the payment of taxes, as in the case of IPTU (the real estate tax in the city) and, in the future, this can be expanded to services such as taxi races, for example,” the statement further added.

Brazil’s capital city’s decision to accept Bitcoin as a valid mode of currency comes at a time when cryptocurrencies face headwinds across the world in terms of their volatility, and the rise of central bank digital currencies (CBDC) in nations such as USA and India.

In India, for instance, reports have suggested that the upcoming cryptocurrency regulation bill may classify the digital tokens invalid as a currency, but treat the same as assets for specific investors. Such a move may not ban the use of cryptocurrencies in the country, but could lay down strict norms against brands accepting payments in Bitcoin, Ether or any other crypto token for products and services.

As of now, select city and national governments have moved to allow cryptocurrencies as legal tender. El Salvador was the first nation to do so, followed by the American state of Arizona.