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This week, a bill concerning the regulation of the cryptocurrency market in Brazil was passed by the Senate, pushing for new legislation that has been in the works for years.
On April 26, the senator moved the bill forward that consisted of inputs from three other bills that are roaming around Brazil’s Congress as lawmakers do not want to lag behind the emerging technology.
There are a few reasons why well-defined cryptocurrency legislation in Brazil would be significant. The law would outline digital assets and their service providers, considering that Brazil is the largest crypto market in Latin America in terms of transaction volume.
Over the recent years, the country has witnessed a massive number of scams, and the regulation will help outline the methods to curb scams such as money laundering.
The executive branch of Brazil will be in charge of deciding which body will be responsible for regulating and supervising cryptocurrency providers. Also, these firms would need the approval of the agency before operating.
Irajá Abreu, the rapporteur of the bill, in an interview given to Bloomberg in February, stated that the central bank of Brazil should be given in charge of regulating cryptocurrency businesses.
A set of guidelines regarding the protection of clients’ funds and personal data in line with international standards will be laid out for the virtual asset service provider as per the law.
Chainalysis’ latest crypto report reveals that Brazil was the largest crypto market in Latin America in terms of transaction volume, collecting cryptocurrencies worth approx. $91 billion between the period July 2020 and June 2021.
The penal code of Brazil to define digital asset fraud would be updated as:
“Organizing, managing, offering wallets or intermediating operations involving virtual assets, securities or any financial assets in order to obtain an unlawful advantage, to the detriment of others, or misleading someone, through artifice, ruse, or any other fraudulent means.”
Anyone found to be providing digital asset services will face a jail time of six years along with a fine, according to altered Brazil’s penal code. This is less than what was proposed in an earlier working version of the bill, four to eight years. All the crypto scams amounted to 2.5 billion reals ($503 million) in 2021, according to Brazil’s Senate news service.
Now, the Chamber of Deputies, the lower house of Brazil, will consider the bill. If it gets passed, it will be sent for a vote to Jair Bolsonaro, the president of Brazil.
It is also important to note that the focus of the law is not on the Bitcoin legal tender, contrary to what is being said on social media platforms. Besides, as per Brazil’s Senate news agency, the cryptocurrency regulation also does not include NFTs.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
