Brazil’s Senate has taken the first steps to adopting cryptocurrency with the unanimous approval of a bill to regulate digital assets. If approved, Brazil would become the largest Latin American nation to regulate cryptocurrencies.
The bill would provide the framework for how crypto can be accepted and used as a day-to-day payment option.
The Senate economic affairs committee approved Senator Flavio Arns’s proposal, which seeks to give joint overview to the Brazilian Central Bank and the national tax agency.
Two competing bills presented by senators Styvenson Valentim and Soraya Thronicke were shelved.
The bill defines virtual assets and classifies their service providers, giving the federal government authority to determine which body will be responsible for regulating business.
Senator Iraja Abreu, who wrote the draft, told Bloomberg that Brazil’s Banco Central had a hand in constructing the bill.
“With regulation, cryptocurrency will become even more popular,” Abreu said. “Once this regulation is approved, the trend is that it will be increasingly adopted in the supermarket, in commerce, in a car dealership.”
According to the bill, crypto providers must prevent money laundering and concealment of assets, while combating criminal organizations, the financing of terrorism, and the proliferation of weapons of mass destruction. The draft proposes a fine or imprisonment for violations.
40% of crypto holders in Brazil earn less than minimum wage
Crypto adoption is expanding dramatically in Brazil, especially among the least wealthy. The Business Administration School of Sao Paulo claims that 40% of holders earn less than the country’s minimum wage.
Brazil will roll out its pilot program for a national digital currency this Sept, before going public in 2024.
Last year, the central bank’s Roberto Campos Neto said that crypto purchases are affecting Brazil’s import figures.
“[Crypto] is already starting to affect even the national accounts, which means it has become a relevant investment instrument,” he told local media outlet Estadao.
The bill must now be voted on by the whole Senate, followed by the lower house. If approved, President Jair Bolsonaro will then sign it into law.
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