Brazil heads into an October 4 presidential election that could reset the country's crypto rules for years. A win for Luiz Inácio Lula da Silva points toward tighter oversight and a stablecoin tax, while a win for Flavio Bolsonaro leaves the policy direction open, despite his defense of associates tied to a $7 billion crypto investment pyramid scheme.
Brazil's presidential election on October 4 could decide the direction of crypto policy in the country ranked number one in crypto adoption. Local polls project the race between President Lula and his closest rival, Flavio Bolsonaro, son of former President Jair Bolsonaro, will progress to a runoff since no candidate is expected to clear 50% of the vote.
A Lula Win Points To Tighter Rules And A Stablecoin Tax
If Lula retains the presidency, analysts expect crypto regulation to tighten further, with increased compliance and requirements for crypto users and institutions. Under his tenure, the Central Bank has already issued a series of resolutions strengthening oversight of crypto exchanges, while law enforcement has moved against crypto use by criminal gangs and cartels. That approach has already pushed the local crypto market into a consolidation phase.
A Lula victory would also give him the backing to revive a plan to tax stablecoin transactions, a measure reportedly shelved for now because of its divisiveness as his party shifted into campaign mode.
Bolsonaro's Crypto Stance Remains A Wildcard
Bolsonaro's direction is harder to read, since there is no record of him addressing cryptocurrency directly. He has, however, asked for the dismissal of criminal charges against two former associates of Glaidson Acácio dos Santos, the "Bitcoin Pharaoh." The Bitcoin Pharaoh's crypto investment pyramid scheme moved $7 billion and affected over 100K customers. A Superior Court of Justice minister ultimately denied that petition.
Prediction Markets Favor Bolsonaro, Even Though They're Banned
While traditional polls give both candidates a roughly equal chance, with some favoring Lula, prediction markets tell a different story. Polymarket gives Bolsonaro a 59% chance of winning, against 41% for Lula. That market has traded over $163 million in volume.
That activity continues despite Brazil's central bank having banned prediction markets under Resolution No. 5,298, issued April 24. According to Bitcoin News, the Secretariat of Prizes and Betting argued the platforms "simply reproduce the essential elements of fixed quota bets."
Source: Bitcoin News
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