A comprehensive legislative framework for cryptocurrencies, governing the use of bitcoin as payment, has been adopted by Brazilian lawmakers in the country.
The new regulations, which were approved on Tuesday night in Brasilia, the nation’s capital, acknowledge bitcoin as a digitised system of currency that can be used in the country as a method of payment as well as an investment mechanism in the South American nation
The bill now requires the President’s approval to become constitutional and covers a large area referred to as “virtual assets.” The nation does not now recognize bitcoin or any other cryptocurrency as legal cash.
The executive arm is granted the opportunity in the bill for selecting agencies that will be in charge of the market. The Central Bank of Brazil (BCB) is anticipated to be in control when using bitcoin as a form of payment, while the Securities and Exchange Commission (CVM) of the nation will regulate the operation as a kind of investment asset. The BCB, CVM, and federal tax authority (RFB) all made quality donations to the growth and well-being of the overhaul legislation.
Deliberation on the acceptance of Bitcoin
Brazil, which possesses a flourishing cryptocurrency sector, has regularly seen more of its citizen’s trade cryptocurrencies which include bitcoin rather than investing in stocks. Now, the nation aims to create the conditions for that to result in increased regular use of financial transactions.
However, all the text isn’t of help for the expansion and improvement of the country’s market. The defeat of a provision that attempted to reduce various state and federal bills on acquisitions of bitcoin mining equipment was a major oversight in the decision on Tuesday. The incentive would only apply to operations employing renewable energy sources, according to the language, which was rather limiting, but it seems that this was insufficient for approval.
The legislation of service providers, including exchanges, who must adhere to specified criteria to operate in Brazil, is one of the additional stipulations. By defining such organizations as those who supply bitcoin trading, exchange, custody, management, transfer, or selling in place of a third party, the law attempts to govern the creation and functioning of Bitcoin solution providers in Brazil. The supplier of cryptocurrency services can only be mandated to function in the country when given approval by the federal government.
One rule tried to compel such businesses to clearly distinguish between their assets and that of their clients, such as when handling bitcoin on their behalf. Measures aimed to halt issues like the one that happened a few weeks back witnessed with FTX, in which customers’ funds were mixed with the business’s funds, and to aid in the restoration of user funds in the case of bankruptcy. In the vote on Tuesday, it was defeated and wasn’t approved.
Ken Emmanuel is a Blockchain Content writer, a Web3 Enthusiast and a Social Media Management Strategist, he likes writing educative contents to help people gain more knowledge and get inspired. The growth of any organization he work with is always his priority. He is a Geographer by profession and loves reading.