A new cryptocurrency bill was approved by the Brazilian Congress Chamber of Deputies last week and is now awaiting Senate review for approval. The project, if approved, would introduce a central body to regulate all cryptocurrency brokerage activities – apparently the Central Bank of Brazil – and establish new penalties for crypto-related crimes.
Chamber of Deputies passes new Brazilian crypto bill
The Brazilian Chamber of Deputies of Congress has approved a new bill aimed at clarifying the regulation of cryptocurrencies in the country. The project, identified as Bill 2303/15 and proposed by MP Aureo Ribeiro, establishes definitions for exchanges and virtual currencies. It also requires a central body to oversee all cryptocurrency-based operations, which will be appointed by the executive branch of government. The bill will now go to the Senate, which will ultimately decide whether it passes.
The regulation does not specifically mention cryptocurrencies and instead uses the term “virtual currencies”. However, the project specifies that it does not affect the digital representations of the national fiat currency (the real), other international currencies or reward points given by certain companies during advertising campaigns. Virtual currency is defined as a representation of value that can be used electronically for payments or for investment purposes.
More severe penalties and a central regulator
The text includes specific penalties for cryptocurrency-related crimes and establishes a new penalty for exchanges or parties that illegally manage cryptocurrency wallets for third parties. This crime is classified as a form of embezzlement and would be punishable by four to eight years in prison and fines.
Although the bill establishes a central regulator, it cannot explicitly name it for legal reasons. However, Expedito Netto, the rapporteur for the commission that carries the law, said it is likely that this body will be the country’s central bank.
If approved, Brazil would join a group of Latam countries that have rules dedicated to cryptocurrency assets, which are classified differently from other similar assets. El Salvador is one such country, recently approving its so-called “Bitcoin Law”, establishing Bitcoin as legal tender in the country.
Paraguay has also taken steps in this direction, introducing a bill to regulate cryptocurrencies in July. However, the legislation seeks to establish controls over crypto transactions, and instead of viewing bitcoin as a currency, viewing it as a commodity.
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