Rio de Janeiro, one of the continent's most prominent cities, has announced that citizens would be able to pay taxes using cryptocurrencies. It is the first city in the country to do so, realising that the bitcoin market is booming. These initiatives are part of a long-term strategy that will see the city invest some of its funds in crypto assets.
Rio de Janeiro will increase the number of tax payment options available.
The city of Rio de Janeiro has announced plans to include cryptocurrency in its tax payment choices. Officers of the municipality disclosed plans to begin collecting cryptocurrency for a local tax dubbed the IPTU next year at a recent ceremony attended by the city's mayor, Eduardo Paes. This tax is based on the value of inhabitants' properties and is collected by the municipality.
Rio de Janeiro has become the first city in Brazil to accept cryptocurrencies for tax payments. According to a press release, the city will have to rely on third-party corporations to handle payments and convert them to fiat money in order to achieve this goal. The city will only accept Brazilian reals in this manner, while users will be able to pay using cryptocurrency.
Mayor Eduardo Paes commented on the new idea, saying:
Our goal is to make it apparent that there are governmental initiatives in Rio de Janeiro that acknowledge this market. Those who invest in Bitcoin and live in Rio will now be able to spend their assets in the city while paying formal taxes. And we're going to make a lot of progress.
The city's cryptocurrency integration strategy, however, does not end there. According to Pedro Paulo, Rio's secretary of Finance and Planning, the city intends to expand the scope of this new payment system to include more services. According to Paulo,
This could be extended to other services in the future, such as taxi rides. Further, through NFTs, we will employ these crypto assets to stimulate the arts, culture, and tourism, as well as develop a robust and responsible governance framework to assess the realisation of crypto investments.
To achieve this latter goal, the city of Rio will establish a new body, the Municipal Committee for Crypto Investments, which will investigate the best approach to invest some city funds in cryptocurrencies while remaining compliant with all of the country's public spending regulations. The city revealed the idea in January, indicating that 1% of the city's funds would be invested in cryptocurrency at the moment.