Brazilian lawmakers have approved a complete regulatory framework for the trading and use of cryptocurrencies in the country.
Voting Tuesday night in Brasiliathe country’s capital, new regulations recognize bitcoin as a digital representation of value that can be used as a means of payment and as an investment asset in the South American country.
The bill will apply broadly to a sector dubbed “virtual assets” and currently only requires a presidential signature before becoming law. It does not make bitcoin or cryptocurrency the legal tender of the country.
The bill forces the executive branch to choose the agency that oversees the market. The Central Bank of Brazil (BCB) is responsible when bitcoin is used for payments, and the country’s stock exchange commission (CVM) is expected to be the watchdog when it is used as an investment asset. The BCB and CVM, along with the Federal Tax Service (RFB), helped legislators develop the overhaul law.
Home to a vibrant cryptocurrency economy, Brazil sometimes has more citizens trading coins such as Bitcoin than investing in the stock market. Now the country is preparing for it to lead to more everyday use in financial transactions.
However, not all texts are positive for the development of the country’s market. The big failure of Tuesday’s vote was the rejection of a provision that seeks to cut some of the state and federal taxes on the purchase of his bitcoin mining machines. Although the article was highly restrictive (the benefits only apply to businesses that use renewable energy sources), it was clearly insufficient for approval.
Other provisions include regulations for service providers such as exchanges, who must follow certain rules in order to do business in Brazil. The bill aims to regulate the establishment and operation of bitcoin service providers in Brazil and defines entities that offer to trade, transfer, store, manage or sell cryptocurrencies on behalf of third parties. I’m here. Cryptocurrency service providers may only conduct business in the country after obtaining express federal approval.
One rule sought to require such companies to explicitly separate their property from the capital owned by their customers. This provision was intended to prevent the commingling of user funds with company funds, which has recently been seen on FTX, and to help recover user funds in the event of bankruptcy. It was rejected in Tuesday’s vote.
