Lawmakers in Brazil have approved a cryptocurrency framework bill for the use of digital currencies in the Latin American country.
Brazilians will be able to use Bitcoin as a payment mechanism if the legislation is implemented, and digital assets will be recognized as a form of an investment asset.
Regulating Crypto In Brazil
The purpose of House Bill 4401/21 is to create a body to regulate the cryptocurrency market in Brazil. This involves overseeing service providers’ operations, such as cryptocurrency exchanges.
The measure stipulates that in order to gain access to the Brazilian market, exchanges must abide by certain regulations like using procedures to separate user funds from exchange funds, for instance. Service providers must also obtain federal government approval in accordance with the regulations.
The agency will assign duties to the proper, already-existing governmental authorities. According to Bitcoin Magazine, the Brazilian Central Bank will oversee the usage of Bitcoin for payments and the Comisso de Valores Mobiliários (the securities regulator) will be in charge of investment regulatory matters.
The bill falls short of declaring Bitcoin a legal tender, even if it is a significant step toward the use of cryptocurrencies.
Presidential Assent In January?
The president’s signature is the final requirement before becoming law. Jair Bolsonaro, the president at the moment, is scheduled to step down from his position on December 31 after narrowly losing the election to Lula da Silva on October 31.
Bolsonaro supporters have accused electoral fraud, clouding the election result. Bolsonaro expressed his disappointment at losing and thanked his supporters while urging demonstrators to obey the law.
Before winning the election earlier this year, da Silva told the local media that cryptocurrencies were becoming more popular in Brazil. He continued by saying that a framework is required to align national practices with international norms, particularly in regards to malicious actions.
In his longer form statement, da Silva said that the government, particularly through its independent Central Bank, must establish rules that are compliant with international standards to prevent criminal activities that could use crypto assets, such as money laundering and tax evasion, in addition to avoiding fraudulent trading practices.
Aside from the crypto agenda, he will assume control of a nation that is still working to recover from the Covid-19 pandemic and is racked by extreme inequality. Between 2019 and 2021, 9.6 million individuals lived below the poverty line, while rates of literacy and school attendance declined. He will also have to deal with a severely divided country and pressing environmental problems, such as the widespread destruction of the Amazonian rainforest.
Da Silva will take over on January the 1st 2023.
Image Courtesy Of Shutterstock
