The Brazilian Senate has taken the first step toward regulating the country’s domestic cryptocurrency sector. A bill aimed at establishing a framework for oversight of cryptocurrencies and digital assets, as well as their applications, for the Latin American region’s largest demographic.
The Brazilian Senate’s Economic Affairs Committee approved a major stage in the legislation process. The bill would next be voted on on the Senate floor, and once passed by both the lower and upper houses, it would be delivered to President Jair Bolsonaro for final signature and incorporation into Brazilian law.
The crypto regulation framework detailed in the bill’s passages is aimed at defining the limits and bounds of crypto and digital assets, as well as providing categories that would accommodate and sort the country’s local crypto firms by use case and target market, according to the Brazilian Senate’s notice on the matter. Locally operated crypto exchanges and crypto wallet startups already exist in Brazil, and if the bill is signed into law, these businesses will likely see a significant increase in traction and user growth.
Brazil is building its own central bank digital currency (CBDC), a digital equivalent of the Brazilian real, at the same time as the bill is being processed. However, rather than being used for commercial purposes, this program is intended at bringing investment to the country.
Senator Irajá Abreu of Brazil believes the bill is important to combat the flood of financial crimes perpetrated using cryptocurrency.
Abreu is the bill’s original author, and it was initially submitted for review in 2019.
The law clarifies the various features of what counts as and what constitutes a virtual asset, taking into account the variations between a broker or exchange and other similar businesses that deal with virtual and digital assets such as cryptocurrency.
If passed, the measure will make Brazil the second Latin American country to regulate cryptocurrencies and other digital assets, following in the footsteps of El Salvador’s initiatives, which saw its tourism industry rise by at least 30% since Bitcoin (BTC) became legal cash.
Apart from El Salvador and Brazil, Cuba has also established and issued guidelines to aid in the recognition and organization of crypto and digital asset use cases.
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