Brazil’s crypto regulation bill has passed a crucial legislative stage in Senate, where it’s now slated for voting. The development came on February 22 when the Senate’s Economic Affairs Committee unanimously adopted the proposals.
If the bill is passed by the Senate, it will move to the lower house, the Chamber of Deputies, where it will be discussed and voted upon. If it is passed by the lower house as well, it will be presented before President Jair Bolsonaro to sign it into law.
In case that happens and President Bolsonero makes it official, Brazil will become the largest Latin American country to allow cryptocurrencies to operate within its borders as per a set of regulations decided by its government.
The regulation should ensure that investors’ interests are protected by the law. Misuse of cryptocurrencies through money laundering, terror financing, and other similar activities will also come under the legal net.
What the Bill Proposes?
Introduced by senator Flavio Arns, the bill defines virtual assets and service providers such as brokers and digital assets exchanges. It stops the Brazilian Securities and Exchange Commission from regulating crypto activities, except initial coin offerings (ICOs).
The bill proposes crypto activities be supervised jointly by the Brazilian Central Bank and the tax collection authority, Receita Federal. The federal government will have the power to appoint a crypto supervisor to oversee and report the day-to-day affair of the entire industry.
It makes it mandatory for digital asset firms to bring any suspected transaction or instances of money laundering to the notice of the Brazilian Financial Activities Control Council.
New crimes involving virtual assets will be punishable by four to eight years in prison and a cash fine.
Crypto firms that neutralize 100% emission are exempt from taxation on purchasing machinery and software for crypto trade, transaction, and mining.
Example of El Salvador
Among the Latin American countries, El Salvador stands out as a leader since it adopted bitcoin as the legal tender in September 2021. Ever since then, the nation and its maverick President Nayib Bukele have been in the news for their bitcoin activities.
In a survey report from September last year, almost half of the Brazilians favored making bitcoin an official currency. Financial stability and protection against inflation were the main reasons for bitcoin as their choice.
Earlier, a member of Brazil’s lower house, the chamber of deputies, proposed a bill to provide public and private sector workers to be paid in BTC.