Brazil’s National Congress approved Bill 458/21 on October 29, advancing a framework that allows citizens to regularize undeclared assets, including Bitcoin and other cryptocurrencies, by paying a 30% tax. The proposal has now returned to the Senate for a final vote, offering investors a one-time opportunity to declare crypto holdings acquired legally but omitted from previous income tax filings.
Under the new Special Regime for Asset Update and Regularization (REARP), investors who failed to declare or undervalued their digital assets can bring them into compliance. The 30% total charge is split between a 15% capital gains tax and a 15% fine, applicable to the market value of assets as of December 31, 2024. The law also extends to other assets like real estate, vehicles (land, sea, and air), values, securities and shares in the Income Tax, which can be updated at a lower 4% rate.
Government Targets Revenue Amid Brazil’s Crypto Surge
Brazil’s crypto economy is expanding at a progressive pace in the region. In early October, blockchain analysis firm Chainalysis reported that transaction volume surpassed R$1.7 trillion between mid-2024 and mid-2025, a 109.9% annual increase. The majority of this activity came from stablecoins, used not only for trading but increasingly for remittances, payments, and business transactions.
Amid this expansion, urgency is growing around the new 30% regularization bill, which formalizes tax treatment for undeclared Bitcoin and crypto holdings.
A Path to Legal Clarity for Crypto Investors
The REARP proposal marks Brazil’s clearest move yet toward defining how crypto assets fit within its tax system. For digital asset holders, the measure provides both a legal shield against tax crime prosecution and a structured pathway to compliance, with payment options spread across 24 months and interest tied to the Selic rate, which is the Brazilian economy’s basic interest rate, set by the Central Bank to control inflation, now at 15% a year.
The initiative could generate billions in new tax revenue, reflecting Brazil’s President Luiz Inácio Lula da Silva’s fiscal tightening efforts. Meanwhile, the inclusion of previously rejected provisions from Provisional Measure (MP) 1.303/25, which aimed to raise around R$20 billion through higher tax collection, triggered heated debate. That decree, withdrawn earlier this year after investor backlash, had alarmed the crypto sector for potentially increasing taxation on trading gains and restricting loss offsets.
Political Fallout: “A Government Maneuver”
Opposition lawmakers accused the government of reviving a failed tax decree through the back door. Liberal Party leader Sóstenes Cavalcante (RJ) denounced the move as a “shortcut to boost revenue,” while Gilson Marques (Novo-SC) called it “an artifice to pass what Congress had already rejected.” Government allies, including Lindbergh Farias (PT-RJ), defended the inclusion, arguing that it restores the lost fiscal capacity needed for the 2026 budget.
Legalization with a Price Tag
For Brazil’s blockchain industry, the bill’s approval is both a milestone and a caution. On one hand, it clarifies tax obligations and provides legal protection for the Central Bank and compliant investors. On the other hand, it sets a steep entry price: a 30% levy that could discourage smaller holders.
The Senate’s final vote will determine whether Brazil formalizes what many see as a de facto legalization of Bitcoin and crypto holdings. If approved, it could mark a turning point for Latin America’s largest economy, one where crypto assets officially enter the national tax framework, and regulatory oversight takes precedence over informal adoption.