Cryptocurrency sector is soon going to be subject to regulations in Brazil. The crypto regulatory bill in the biggest Latin American country cleared the crucial legislative phase on February 22 after the Senate's Economic Affairs Committee unanimously approved the draft. This crypto bill had been in the works for three years since 2019. Senator Flavio Arns, who first started working on it, later joined forces with the central bank, securities exchange commission, as well as the with Brazil's federal tax authority.
Putting a cuff on the misuse of crypto assets in cases of fraud, money laundering, and tax evasion has emerged as one of the main purposes of Brazil's regulatory bill.
Along with proposing tax incentives for crypto miners, the framework also seeks to only permit officially authorised crypto-related platforms to operate in Brazil.
Senator Iraja Abreu, meanwhile, has highlighted that the central bank of Brazil will inspect crypto companies as well as ensure that crypto assets serve to be profitable investment ventures.
“Crypto asset trading companies are neither subject to regulation nor to the control of the Central Bank or the Securities and Exchange Commission, which makes it more difficult for the public authorities to identify suspicious transactions,” Agência Senado quoted Senator Abreu as saying about the proposed legislation.
Using cryptocurrencies as an alternate means of payments is also under consideration as part of Brazil's proposed bill.
The development comes after Brazil witnessed major interest in the crypto sector from its investor community.
As per Senator Abreu, “almost three million Brazilians are registered with crypto exchanges”.
“In 2018, BRL 6.8 billion (roughly Rs. 10,041 crore) in virtual currencies were traded in Brazil, with 23 new exchanges (brokers) being created. In 2019, there were already 35 companies acting freely, without the supervisor or supervisor of financial system bodies, such as the central bank or the stock exchanges,” the update by Agência Senado added.
Once passed by both the Senate as well as the lower house, Brazil's crypto bill will be sent to President Jair Bolsonaro to be signed into law.
For now, El Salvador is the only Latin American country to have officially acknowledged Bitcoin.
In September last year, El Salvador legalised Bitcoin as a payment alternative and its President Nayib Bukele is now creating a tax-free Bitcoin City to facilitate the mining and growth-driven projects linked to the crypto asset.
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