Jair Bolsonaro, the President of Brazil, has inked a bill to turn Bitcoin as well as the rest of the crypto assets into regulated and legal options for payments across the jurisdiction. As per an analyst, this is a move toward the wide-scale adoption of the chief crypto token.
The bill was authorized by Bolsonaro into law to establish a complete and formal agenda of Brazil for the utilization as well as the trading of digital currencies in the country.
Brazil Offers a Green Light for Crypto Payments, Paving the Way to BTC Adoption at a Large Scale
This news is published in the official journal of the Brazilian federal government. The respective bill, after being authorized by the country’s Congress, was inked a few days ago. In the publication, it was noted that a digital value representation – that can be transferred or traded by electronic methods and utilized for investment or payment purposes – comes under the definition of a virtual asset.
In this way, foreign or national currencies and electronic currencies are not included in this category. In addition to this, the instruments offering some services and benefits (like rewards and points under loyalty programs) as well as the financial assets are securities are also excluded from this field.
In the definition of virtual asset providers (VASPs), the institutions that operate under the 3rd parties to offer any of the services like the exchange between the foreign/national currency and virtual assets, administration or custody of virtual assets, and taking part in financial services as well as the services offered by an issuer, are included.
The document points out that the providers of virtual asset-related services may just operate in Brazil with prior approval from the relevant agencies. The citizens of the country will not have the capability to utilize crypto assets in the form of legal tender within the jurisdiction.
While discussing the illegitimate activities dealing with cryptocurrency, the bill declares that the culprits will be penalized with charges along with imprisonment for up to 8 years.
The latest law is to be implemented after up to 180 days of its formal publication. The Brazilian Securities and Exchange Commission (or CVM) and central bank (or BCB) will expectedly operate together to observe the market while fulfilling their separate roles.
The BCB’s focus will be on the utilization of cryptocurrency for payments whereas CVM would pay attention to the crypto assets’ use in investments.
Nonetheless, the government agencies to play the role of overseers have not been specified at present. According to the former reports, the country’s central bank issued a resolution to establish an interdepartmental operating group devoted to tokenization.
The respective group would finally suggest regulatory amendments associated with the settlement, trading, custody, and registration of financial assets having blockchain technology as their basis.
The Overall Strategy of Brazilian Regulators Remains Strict for Crypto Assets
The group, after accomplishing its meetings project in the next year, will make a final report to be offered to the Governance, Risks, and Controls Committee of the bank.
While it appears that BCB does not have a crypto-favoring stance, the CVM was formerly enthusiastic to pursue a permissive approach toward the regulation of crypto. Nevertheless, in the previous months, its policy has reversed and now it is endeavoring to police this space.