Lawmakers in Brazil have approved a comprehensive regulatory framework for the trading and use of cryptocurrencies in the country, with new regulations recognizing Bitcoin as a payment instrument and an investment asset.
The bill only needs the President’s signature to become law.
The relevant bodies
Under the bill, the executive branch will select government agencies to oversee the cryptocurrency market. The Central Bank of Brazil (BCB) will be in charge when Bitcoin is used as a payment, while the country’s Securities and Currency Commission (CVM) will be the overseer when it is used as an investment asset. Both the BCB and CVM, along with the Federal Tax Board (RFB), helped lawmakers create the general inspection legislation.
Live cryptocurrency economy
Brazil is home to a vibrant cryptocurrency economy and has at times seen more of its citizens trading currencies like Bitcoin than investing in the stock market. Now, the country is looking to lay the groundwork for this to translate into more everyday use in financial transactions.
A tax cut for mining was rejected
However, not everything in the text is positive for market development in the country. A major miss from Tuesday’s vote was the rejection of a clause that sought to reduce certain state and federal taxes on Bitcoin mining machine purchases. While the text was quite restrictive, as the benefit would only apply to businesses that use renewable energy, it apparently wasn’t enough to pass.
About the exchanges
Other provisions include the regulation of service providers, such as exchanges, which would have to comply with certain rules to operate in Brazil. The bill seeks to regulate the establishment and operation of Bitcoin service providers in Brazil, defining entities such as those that provide cryptocurrency trading, transfer, custody, management or sale on behalf of a third party. Cryptocurrency service providers will only be able to operate in the country after explicit authorization from the federal government.