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The Brazilian city of Rio de Janeiro will allow the payment of a municipal real estate tax with cryptocurrencies starting in 2023, the city announced on Friday.
Through this initiative, Rio de Janeiro will become the first city in Brazil to allow the payment of a tax using cryptocurrencies. The state administration will not store crypto because payments will be immediately converted to Brazilian reais through a company that has not yet been contracted, the city added in its official statement.
"Our effort here is to make it clear that in the city of Rio we have official initiatives that recognize this market," Rio de Janeiro Mayor Eduardo Paes said in a statement, adding: "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."
In January, Paes said the city plans to allocate 1% of its treasury reserves to cryptocurrencies. Through the initiative, the city is seeking to become a global crypto hub and reduce locals' distrust towards cryptocurrencies, Rio de Janeiro's secretary of economic development, Chicão Bulhões, told CoinDesk.