The lower house of Brazil’s parliament approved a cryptocurrency bill that seeks to establish a stringent regulatory framework in the country, a theme that resonates with several governments around the globe after the collapse of FTX. Now, the legislation has been sent to the President, Jair Bolsonaro, for his approval.
Among other things, the bill makes it necessary for crypto firms active in the country to be registered and have physical offices, media reports said.
Brazil is at the 7th spot in Chainalysis’s 2022 Global Crypto Adoption Index.
Brazil’s Chamber of Deputies on Tuesday passed the crypto regulation bill that empowers the country to exercise greater oversight on the sector. It paves the way for the appointment of a federal agency that will regulate firms dealing with virtual assets.
The bill makes it binding for crypto firms active in the country to submit themselves to the new laws, which prescribe fines and prison terms in case of a breach, by having their physical offices in the country.
It applies to legal entities that provide the transfer of digital assets or conversion of digital assets into domestic or foreign currencies. Financial services involving virtual assets also fall under the purview of the proposed law.
Brazil’s Chamber of Deputies is a federal legislative body and the lower house of the country’s National Congress. It carries greater importance in terms of passing laws, and, according to local legislation, President Bolsonaro could either approve or veto the bill without directly rejecting it.
Brazil’s proposed law to strictly regulate the cryptocurrency sector reflects the growing call for such laws in several jurisdictions. For example, the Indonesian parliament is debating a similar bill that proposes to bring a comprehensive legal framework for the regulation of cryptocurrency trade and transactions in the country.
Recently, Indonesian Finance Minister Sri Mulyani Indrawati said the proposed law will bring the cryptocurrency sector under the jurisdiction of the Financial Services Authority (OJK). Currently, it’s dealt with by the Commodity Futures Trading Regulatory Agency.
The common refrain is that governments and regulators are alarmed by the quick fall of several leading firms in the past few months, and, therefore, they’re seeking greater oversight and scrutiny of the crypto sector. Some of them want stricter regulation also in recognition of the vital role digital assets are playing in the global financial system and that they can be misused.
They think the possibility of illicit activities involving digital assets must be prevented by institutionalizing the safeguards. Early this month, CryptoPotato reported how Canada is trying to fast-track regulations for this sector in light of these considerations.