Brazil’s Rio de Janeiro to allow digital asset tax payments

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Rio de Janeiro will allow its residents to pay property taxes in digital assets starting in 2023, a decree published this week has revealed.

The move was first announced in March by Mayor Eduardo Paes. 

“Our effort here is to make it clear that in the city of Rio we have official initiatives that recognize this market. Now those who invest in cryptocurrency and live in the city of Rio will be able to spend this asset here paying official tax in the city of Rio. And we’re going to move on this fast,” the mayor said at the time.

Paes has now published a decree calling for applications from virtual asset service providers who wish to process digital asset payments starting in 2023. The decree was scant on details about the process or which digital assets the city will accept as payment. However, it hinted that residents will have a few options and that it would be adding to the list of accepted assets soon.

“Rio de Janeiro is a global city,” Mayor Paes stated. “Therefore, we are following technology and economic advances in the universe of digital financial assets. We have a look to the future and we want to become the country’s capital of innovation and technology. Our city is the first in Brazil to offer the taxpayer this type of payment.”

While the residents will make the payments in digital assets, the city government will only receive the funds in fiat. It will rely on its partner VASPs to convert digital assets with no additional costs to the taxpayers.

Mayor Paes has been a longtime digital asset supporter. In January, he committed to allocate 1% of the city’s treasury reserves to digital assets. 

“We know that [BTC] is volatile, that some people criticize us for that, but it is the future, and Rio wants to be a reference for the world as a cryptocurrency-friendly city, like Miami or Zug in Switzerland,” one of the officials in Mayor Paes’ government explained at the time.

Rio joins other cities globally exploring digital asset tax payments, the most recent being Colorado. As CoinGeek reported, Governor Jared Polis announced last month that Coloradans can now pay their taxes in digital assets, but only through PayPal and for a 1.83% fee.

Watch: The BSV Global Blockchain Convention panel, Blockchain for Digital Transformation of Nations