In a recent ruling, the Brazilian electoral court (Tribunal Superior Eleitoral, TSE) has reaffirmed its prohibition on the use of cryptocurrency donations to finance political parties and candidates during electoral campaigns in Brazil. This decision, outlined on the TSE's website, extends the existing ban on crypto donations up to the 2024 municipal elections, scheduled for October 6 with a runoff vote on October 27.

The TSE's stance aims to maintain transparency and accountability in political funding, emphasizing the need to track donations accurately to uphold the integrity of the electoral process. The court's regulations explicitly forbid the use of virtual currencies and third-party-managed prepaid cards for electoral expenses, reinforcing its commitment to overseeing fair elections and safeguarding against irregular or illicit practices.

Under these rules, all donations exceeding approximately $200 must be conducted through bank transfers for enhanced scrutiny and verification. Additionally, the TSE emphasizes that even contributions below the $200 threshold are prohibited if made in cryptocurrency, a stance initially established in December 2019 and consistently upheld through subsequent guideline updates.

Despite hopes within the crypto community for a policy shift given Brazil's increasing adoption of digital assets, the TSE's decision underscores its dedication to upholding regulatory standards and preventing potential misuse of crypto in political financing. Candidates are required to adhere to the TSE's guidelines by accurately reporting their financial activities, with non-compliance risking scrutiny and potential repercussions from the Public Prosecutor's Office and the court system.

As Brazil navigates the intersection of cryptocurrency and political funding, regulatory clarity and adherence to established rules remain paramount to ensure the transparency and integrity of the electoral process.