Brazil’s Senate Takes A Major First Step Towards Crypto Legalization

Crypto industry enthusiasts have been excited about Brazil for a while now. One of the largest in South America, Brazil has grown as a hotbed for crypto activity.

Brazil’s Senate Takes A Major First Step Towards Crypto Legalization

It would appear that the Brazilian government is also noticing the growth in its crypto space and is taking steps to make these assets more available to citizens.

Setting Crypto Started in Brazil

Late in February, a bill aimed at regulating cryptocurrencies in Brazil finally made it to a Senate hearing. The bill, which local Senator Irajá Abreu promoted, has been touted as a means for the government to curb cryptocurrency crimes and build a proper framework for the operation of digital assets and crypto business in Latin America’s biggest nation.

Speaking to reporters, Sen. Abreu explained that Brazil has a thriving crypto economy. But, like every impressive innovation, digital assets have the potential to be used in criminal activity. This bill is expected to stop that, ensuring that the government has a proper basis for handling digital assets moving in and out of the country.

“The intention of the project is to curb or restrict illegal practices, such as money laundering, tax evasion, and many other crimes. There is a market that is licit, legal, which is the vast majority of this market, but there are exceptions,” he added.

For now, there is a lot of optimism that the bill will pass through. It got approved by the Senate’s Economic Affairs Committee on Tuesday after a unanimous vote to move it to the main Senate floor. The sentiment is that it will pass in the Senate, then move to the lower house. If it passes there too, the bill will move to the desk of President Jair Bolsonaro to be signed into law.

Abreu has been urging Brazil’s parliament to take action on crypto for a while now. He first proposed the crypto bill in 2019, but he didn’t make much progress at the time. Now, he feels more confident about the prospects of passing it.

Speaking to Bloomberg, the young senator explained that the passage of this bill would lead to massive adoption of crypto in Brazil. The trend could lead to things like crypto payments for goods and services and perhaps even public investment in digital assets.

Among other things, the new crypto bill offers a definition of virtual assets and the various requirements for crypto exchanges and brokers; and even the arms of the Brazilian government that will be responsible for regulating the fledgling space.

There’s Already A Market

If the bill does pass, it will make Brazil among the biggest Latin American countries to embrace crypto. The country appears to be following in the footsteps of El Salvador, which made Bitcoin an official legal tender back in 2021.

But, unlike El Salvador, Brazil has something going for it - a lot of its citizens, and even government officials, actually love crypto.

Earlier this year, Eduardo Paes, the mayor of Rio de Janeiro, announced that he planned to allocate 1 percent of the city’s treasury into Bitcoin. The investment is part of the “Crypto Rio” project, where Paes plans to turn Rio into a crypto hub. In January, the mayor explained at the Rio Innovation Week, joining a panel filled with pro-crypto politicians like Miami mayor Francis Suarez.

“We are going to launch Crypto Rio and invest 1% of the treasury in cryptocurrency. The government has a role to play,” Paes said, adding that the state also planned to introduce tax exemptions for the crypto industry.

At the panel, Rio finance secretary Pedro Paulo also noted that the Brazilian government is considering imposing a 10 percent discount on property tax in the country for Bitcoin payments.

At the same time, Brazil is also working on developing a central bank digital currency (CBDC). A report confirmed that a digital version of the Real is coming soon, with the government hoping to have a working asset up by 2023.

A digital Real is expected to improve the payment infrastructure in Brazil while also keeping the country more digitally competitive. The government also believes that such an asset will go a long way in boosting financial inclusion for its citizens.

With initiatives like these, there is a lot of hope that the crypto regulation bill will pass easily. But for now, the market will have to wait and see.


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