Last week the Chamber of Deputies of Brazilian Congress approved a new cryptocurrency law. The Senate is still reviewing it for approval. The project, if approved, would introduce a central body to regulate all cryptocurrency brokerage activity — ostensibly the Central Bank of Brazil — and establish new penalties for crypto-related crimes.
Brazil: New Crypto Bill passed by the Chamber of Deputies
A new bill has been approved in Brazil by the Chamber of Deputies of Congress. It aims to simplify cryptocurrency regulation. The bill, Bill 2303/15, was proposed by Deputy Aureo. It defines exchanges as well as virtual currencies. A central authority will need to be established by the executive branch in order to manage all cryptocurrency-based activities. Now, the Senate will vote on whether or not to pass the bill.
The regulation doesn’t mention cryptocurrencies by name, and instead uses the term “virtual currencies.” However, the project does clarify that it doesn’t affect the digital representations of the national fiat currency (the real), other international currencies, or rewards points given by some companies in advertising campaigns. Virtual currency can be defined as any representation of value that is digitally accessible for payment or investment.
Harsher Penalties, and a Central Regulator
The text includes specific penalties for cryptocurrency-related crime and establishes a new penalty for exchanges or parties that illegally manage cryptocurrency portfolios for third parties. The crime would fall under the umbrella of embezzlement, and could be punished with four- to eight years imprisonment and fines.
Although the bill names a central regulator it does not name it. However, Expedito Netto, the rapporteur of the commission that carries the law, stated that it’s likely this body will be the nation’s central bank.
Brazil will join the group of Latam countries that have created rules to protect cryptocurrency assets. They are not classified in the same way as other assets. If Brazil is approved it would become a member of this group. El Salvador is one of these countries, approving its so-called “Bitcoin Law” recently, establishing Bitcoin as legal tender in the country.
Paraguay, which introduced in July a bill to regulate cryptocurrency trading, has taken similar steps. But the bill seeks to control crypto transactions. Instead of treating it as currency, the legislation views bitcoin as a commodity.
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