Brazil’s lower house of Congress approved a bill aimed at boosting oversight of the country’s cryptocurrency space, marking a step closer to legitimizing the digital tender in one of the top 10 crypto-ready markets in the world.
The bill, which was adopted by the Senate in April but was lodged for a long time in the Chamber of Deputies, now only needs the executive branch’s assent to become law. Until end of the year, the executive branch is still currently headed by outgoing president Jair Bolsonaro.
Shortly after his election, right-leaning Bolsonaro seconded terminating an $11.5-million project to promote the creation of a cryptocurrency for indigenous people to use. In an interview, he lauded the move to block the effort that “wanted to teach the Indian to use bitcoin.”
When prodded further about the digital currency, the Brazilian leader simply said, “I do not know what bitcoin is.”
Shortly after his address, Bolsonaro clarified that bitcoin was a “virtual currency.” It is worth noting that project proponents then said that it will neither receive funding or support, nor will it integrate bitcoin.
Returning president Luiz Inácio “Lula” da Silva–who beat Bolsonaro by a hairline margin in October–has stated during the campaign that the government should “monitor the impact of the crypto market on the health of the financial system,” and that the central bank should develop regulations to prevent the illegal use of cryptocurrency for money laundering and fraudulent trading.
“Crypto assets have grown a lot in recent years and… deserve the attention of the authorities,” the left-leaning president-elect said.
It is estimated that around 16 million people, or 7.8% of Brazil’s total population, currently own crypto assets.
Introduced by deputy Aureo Ribeiro, the bill creates a new crime of fraud with virtual assets, punishable by two to six years in prison and a fine. It also calls for the formation of a “virtual service provider” license, which will be obtained by businesses like exchanges and other crypto corporations.
The legal proposal states that crypto assets classified as securities will be controlled by the Brazilian Securities and Exchange Commission, while other digital assets not classified as securities will be overseen by another entity nominated by the executive branch. The Central Bank will most likely be chosen, which da Silva earlier in the campaign said should be the agency responsible for building cryptocurrency regulations.
Should it become a law, companies will have 180 days to comply with the new rules before it officially takes effect.
Information for this briefing was found via Reuters, Coindesk, The Street, Coin Telegraph, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.