A bill regulating the cryptocurrency market in Brazil is due to be approved by the National Congress in the first half of this year. If passed, it would allow the President of Brazil to appoint or create a regulatory agency to oversee the cryptocurrency market.
The bill, which has been debated in the Chamber of Deputies since 2015, was approved in the first round of consideration. The Senate attached it to another cryptocurrency-focused bill that had already been approved by the Senate Economic Affairs Committee.
The two legislators, Senator Iraja Abreu and MP Aureo Ribeiro , both rapporteurs on the aforementioned proposals in their respective legislative chambers, are drafting a single text of the bill, which will be sent to the full Senate for a vote.
“I do everything in contact with the speaker of the chamber, who has done a very good job. The technical group of the Central Bank also provided great assistance. The texts are similar and converge into one,” Senator Iraja said.
Iraja also noted that Senate President Rodrigo Pacheco is expected to bring a single bill to the April plenary vote.
“By bringing the projects together, we have accelerated the approval of this milestone for cryptocurrency. There is market demand for a safer business environment and the need for criminal classification to avoid fraud, in addition to bringing Brazil into line with international agreements,” he said.
The adoption of the law in the plenary will not make bitcoin legal tender in Brazil, as in El Salvador.
The proposed law would allow the President of Brazil to designate the federal body responsible for setting the rules for cryptocurrencies. The President will either create a new regulator or delegate this function to the National Securities and Exchange Commission (CVM) or the Central Bank of Brazil (BC).
The regulator will be responsible for defining market benchmarks and setting norms in line with international standards to prevent money laundering and hiding assets.
The bill also proposes a sentence of four to eight years in prison in addition to a fine for those who commit fraud in the provision of virtual asset services.
Another point highlighted in the bill is a set of incentives for crypto miners to open stores in Brazil. It is proposed to exempt from taxes the import of ASIC into the country. However, that may not be enough to lure cryptocurrency miners into the country, given that Brazil’s electricity rates are among the highest in South America – about five times higher than in countries like Paraguay and Venezuela.