Brazil upholds the ban on crypto donations for political campaigns, citing transparency concerns. The electoral court says only bank transfers are allowed.
The government has upheld the prohibition on using cryptocurrency donations to finance political parties and candidates’ electoral campaigns in Brazil.
The Tribunal Superior Eleitoral, or TSE, the nation’s electoral court, stated in a ruling published on its website that it would “maintain” an existing “ban on the use of donations made in cryptocurrency.”
The jurisdiction of the TSE’s decision extends until the municipal elections in 2024. This year, polls are scheduled for October 6. The date set for the run-off election is October 27.
Community Setback as Brazil Maintains Ban on Cryptocurrency Donations
In October, Brazilian citizens elect local councilors and deputy mayors in more than 5,500 regions.
The recently issued decision revises the current regulations about the financial support of political campaigns. The TSE composed:
“The payment of electoral expenses with virtual currencies and pre-paid cards managed by third parties is prohibited.”
The TSE justified the prohibition by asserting that its regulations “seek to guarantee transparency and accurate monitoring of contributions rendered to political campaigns.”
It stated that “its accountability and legal obligations” led to the decision.
According to the electoral regulator, the updated regulations would strengthen its “commitment to oversee the integrity of the electoral process.”
It further stated its commitment to safeguard elections from illegitimate or irregular activities.
Regulator: Banks Must Manage Political Donations
The regulations state that donations in excess of $200 “may solely be executed via bank transfer” and are subject to cross-verification.
“All” cryptocurrency donations, including those worth less than $200, continue to be prohibited. In December 2019, the TSE explicitly prohibited cryptocurrencies as a donation instrument.
It has issued multiple updates to its guidelines since then. In every instance, it has unequivocally prohibited cryptocurrency donations.
Members of the crypto community had been anticipating a shift, given the extraordinary pace of adoption observed in Brazil and the broader LATAM region.
The regulator Orders Candidates to Abide by the Rules
In addition, the TSE mandated that all candidates provide comprehensive financial statements that include information on their donations and expenditures.
The organization warned that individuals who violate its regulations could be subject to censure by the Public Prosecutor’s Office and its judicial system.
Nubank, the largest neobank in Brazil and the third-largest company by market capitalization in the country, announced last month that its banking app would soon support Bitcoin and Ethereum withdrawals.