Brazil's law on cryptocurrency regulation has gone through a crucial legislative phase in the Senate, where it is now due to be voted on. The development took place on February 22, when the Senate Economic Committee unanimously adopted the proposals. If the proposal passes the Senate, it will be moved to the lower house of the Chamber of Deputies, where it will be discussed and voted on. If approved by the lower house, it will be presented to President Jair Bolsonar for signing.
The bill, introduced by Senator Flavio Arns, defines virtual assets and service providers such as brokers and digital asset exchanges. The bill wants crypto-activities to be overseen by the Brazilian central bank together with the tax collection body Receita Federal. The federal government will have the power to appoint a cryptocurrency supervisor to oversee and report on the day-to-day affairs of the industry.
Companies with digital assets are obliged to inform the Brazilian Financial Control Board about any suspicious transaction or money laundering case. New crimes involving virtual assets will be punishable by four to eight years in prison and a fine. Crypto companies that neutralize 100% of emissions are exempt from taxing the purchase of machinery and software for crypto trading, transactions and mining.
If the bill passed, Brazil would become the largest Latin American country to operate cryptocurrencies in accordance with a number of regulations decided by the government. Some other Latin American countries may follow after. In a survey from September last year, almost half of Brazilians called for bitcoin to become the official currency. Financial stability and protection against inflation were the main reasons for bitcoin as their choice.