The Much-Awaited Legislation Opens The Doors To Legal Crypto Usage In Brazil, But There Is Still A Long Way For The Law To Become A Reality

Brazil’s Senate made a historic vote, essentially putting the stepping stone of the country’s crypto revolution and providing the needed legislation for creating a regulatory framework for Brazil’s crypto industry.

However, in order for the bill, first proposed by Federal Deputy Aureo Ribeiro in 2015, to take effect, it must first be approved by the Chamber of Deputies and then signed off by President Jair Bolsonaro. Experts are predicting for the bill to become a law by the end of 2022.

“I want to congratulate the rapporteur of the project, Senator Irajá, for the approval, here in the Plenary of the Senate, for this important bill.” Senate President Rodrigo Pacheco added.

The new “Bitcoin law” actually consists of two bills, voted together on the Senate session on April 26, combining Senator Ribeiro’s bill with Senator Arns’s bill from 2019. According to the legislation, Brazil’s authorities must oversee the crypto usage, either by creating a standalone entity or by delegating the regulation to Brazil’s Securities and Exchange Commission (CVM) or the Central Bank of Brazil (BC).

The session also brought vital questions about the security of the crypto sector, emphasizing on appropriate penalties for crypto crimes, especially fraud.

According to Senator Arns, the penalties for such crimes should be increasing exponentially with the amount of fraud, money laundering, and other white-collar crimes committed.

“The penalties must be proportionate to the amount of value affected by this type of crime. So whoever committed a crime of US $1 billion causing damage to thousands of people would have a greater penalty than the someone who affected less value.” Arns noted.

Regulate the mining in Brazil?

Amid the “Bitcoin law” discussions, which addressed topics like security, penalties, and regulations, Brazil’s Senate also discussed incentivizing crypto miners to open up shop in Brazil, providing them with a complete tax exemption for the import of ASIC mining devices into the country.

Meanwhile, the senior vice president of the digital currencies division of the American mining company CleanSpark, Bernardo Schucman, expressed his opinion that the cryptocurrency market needs specific regulations so that institutional investors can easily invest in crypto mining in South America’s largest country, without taking greater risks.

“Regulation is very welcome [and] the trend is for Brazil to follow the largest economies in the world and facilitate the mining of these coins on Brazilian soil,” Schucman stated.

When moved to the Chamber of Deputies, the bill is expected to see little to no challenges for approval, which would leave Brazil a signature away from putting the Bitcoin law into effect.

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