Brazil is one of several countries that wishes to contribute to the global crypto sector by experimenting with it under safe legal regulations. Brazil's crypto bill, that aims to tighten licencing requirements by industry players among other proposals, has bagged a long-awaited approval from the Brazilian Chamber of Deputies. This brings the bill closer to becoming a law after it gets a nod from a financial executive branch. The bill has been drafted by deputy Aureo Ribeiro.
The number of firms holding crypto assets touched a record high of 12,053 in Brazil this year. The country's taxation authority, Receita Federal do Brasil (RFB), published a report in October, acknowledging a six percent hike from the 11,360 companies that had declared holding crypto in July this year.
Amid the expansion of the digital assets sector, it is only natural that the Brazilian government is accelerating efforts to regulate the industry.
The bill proposes to set up an internal committee that would keep crypto activity in check. The body also plans to create a mandate for crypto firms to acquire the licence of a ‘virtual service provider' before launching operations in the country.
Bitcoin, followed by stablecoin Tether are the two most popular cryptocurrencies held by Brazilian organisations, the RFB claimed in its findings two month ago.
Once the bill gets the last of the permissions required for it to be passed, presently existing crypto companies in Brazil will be granted 180 days to align their processes according to the rules.
In May, Nubank, Brazil's largest digital bank by market value, began offering Bitcoin and Ether to be bought or sold on its platform. Nubank's decision was fuelled by the rising number of crypto investors in the region.
Earlier this year, Rio de Janeiro announced that starting 2023, it would allow its residents to pay property taxes in the form of cryptocurrencies.
Amid an escalation in crypto activity, Brazil has already begun involving law enforcement agencies to keep the crypto sector in check.
A special investigation unit, dedicated to the crypto industry, was also established in July this year by the public prosecution office of Brazil's central-western Federal District.
The unit is comprised of members of the public ministry, judiciary, and the police.
As part of its crypto laws, Brazil is focussing on establishing relevant fines and prison punishments for those who misuse cryptocurrencies for money laundering, fraud, and other white-collar crimes.
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