Who’s one step closer to regulating cryptocurrency use? Brazil is. The Senate Committee (or more precisely The Committee on Economic Affairs) settled on a bill. The bill’s purpose is to regulate cryptocurrency transactions in Brazil. The bill must be passed by both the Senate plenary, and the Chamber of Deputies before it can become law. Once it has passed these hurdles, it will become law 180 days after its publication.
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Even though regulation still seems far away, it’s good to remember that the bill started its journey just five months ago. The world believed that the bill was aiming to NewsBTC: Make bitcoin legal tenderOnline translators were used to help us get the truth of the story. At the time, we quoted Brazil ’s premiere bitcoin journalist Saori Honorato about the future of the bill:
“Last week, the bill was approved by a special committee of the Chamber of Deputies and now goes to the Chamber’s Plenary. If approved by deputies, it advances to the Senate to be discussed once more and, if approved, goes for the president.“
Look at how far this has come already, even to the Senate. It’s worth noting that Brazil ’s President still holds the power to veto the bill at any point. However, Portal Do Bitcoin informsThere are good reasons to believe that he supports the bill.
“Among the senators who voted in favor was Flávio Bolsonaro (Liberal-RJ), son of President Jair Bolsonaro. This indicates that the Chief Executive must have a favorable stance on the Senate bill.”
What’s the Deal with Brazil on The Crypto Bill
There were alternative versions to the bill that suggested two different organizations be in charge of crypto. Both the Federal Revenue Agency AKA tax collectors, and the Central Bank. Another idea was included in the approved version. “The Executive Branch will be responsible for defining which bodies will regulate and supervise business with cryptocurrencies.”
Additionally, the Executive Branch is responsible for authorizing transactions in Brazil that are crypto-related. If said companies detect a suspect transaction, they’ll have to report it to the Financial Activities Control Council. Especially if it’s related to money laundering.
The key aspect of the bill is to “establish rules in line with international standards to prevent money laundering and concealment of assets, and to combat the activities of criminal organizations,” according to Portal Do Bitcoin. It also formally defines some concepts, for example, a “virtual asset”. It’s a “digital representation of value that can be traded or transferred by electronic means and used to make payments or for investment purposes.”
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The bill also defines “virtual service providers” as:
“The company that performs, on behalf of third parties, at least one of the services: redemption of cryptocurrencies (exchange for sovereign currency); exchange between one or more cryptocurrencies; transfer of virtual assets; custody or administration of these assets or instruments to control virtual assets; or participation in financial services related to the offering by an issuer or the sale of virtual assets.”
For “those who commit fraud in the provision of virtual asset services,” the bill contemplates a four to eight years sentence. Additionally, the bill includes a fine.
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Words By The Bill’s Author
In a press release quoted by Portal Do Bitcoin, Senator Irajá, the author of the bill, promises:
“We are creating a regulatory framework to ensure security and transparency. Media covered financial pyramids that have caused harm to citizens and companies. Since 2019, the cryptocurrency market has more than doubled its size. This milestone encourages it to continue growing, but this time fighting financial pyramids, evasions and other crimes.”
Are regulations good for Brazil’s cryptocurrency ecosystem? That’s for the market to decide.
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