• In order to create a coherent regulatory structure, both bills will be merged.
• The adoption rate of cryptocurrency has increased by 260% in Latin America’s largest economy,
• Brazil is seeing a rise in cryptocurrency use.

Brazil may soon be the most regulated country for cryptocurrency assets, thanks to the approval of both bills by the Economic Affairs Commission (NYSE:)).

The proposal presented by Senator Irajá Abreu (PSD-TO) will now go to the Chamber of Deputies where it is expected to be discussed and merged with another bill proposed last year by lawmaker Aureo Ribeiro. Each legislator will come together to discuss the creation of one text which reflects both the intent and spirit of the proposals.

The bill approved by the senate on Tuesday was prepared in conjunction with the central bank, the securities commission (CVM) and Brazil’s federal revenue ministry, Globo.com reported.

“Our objective within this regulatory framework is to invigorate the business environment, not suffocate it,” said Senator Irajá, an ally of President Bolsonaro in Congress.
It seeks to “create mechanisms that can protect good investors, individuals, legal entities, liberal professionals, self-employed, who see an investment opportunity within a business environment that is obviously conducive”, he assured.
If both bills are approved by Congress Brazil, then the president will take office.

Flipside

• Jair Bolsonaro, President of Brazil isn’t a Bitcoin fanatic. He stated several times that he does not know much about crypto currencies.
• The Brazilian leader may not sign any law that imposes the relevant legal sanction. It’s impossible to know.

According to the approved bill, cryptocurrency companies that are already operating in the country’s financial market will have a period of no less than six months to adapt to the new rules.

It also provides for sanctions against unauthorized operators and a crime to be added in the Penal Code for fraudulent use of cryptocurrency. Federal government is responsible for the regulation of digital financial service providers. This will take place under the principle of free enterprise as well as free competition.

Also, the approved text stipulates that crypto trading companies must provide users with information security and privacy protection. The rules of the Consumer Protection Code will apply to all operations in the virtual asset marketplace.

What You Need to Care About

• Brazil is experiencing an increase in interest in cryptocurrencies and this discussion on a clear regulatory framework will help to ensure that it remains a viable market.

Local press reported that the Brazilian tax collector had revealed that they reported 200.7 billion Brazilian Reis to the IRS in crypto transactions during 2021. It is slightly higher than what was reported last year.

In addition, digital money transactions are being reported at a higher rate. In 2021, the average monthly user increase was from 125,000 to 459,000 in 2020.

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