Brazil approves a bill regulating the use of Bitcoin as a payment

Brazilian lawmakers have approved a complete regulatory framework for crypto, regulating the use of bitcoin as payment.Author:NamciosPublish date:Nov 29, 2022Christ the Redeemer/FlickrBrazilian lawmakers have approved a complete regulatory framework for crypto, regulating the use of bitcoin as payment.Brazilian lawmakers have approved a complete regulatory framework for the trading and use of cryptocurrencies in the country.Voted on Tuesday evening in Brasilia, the country’s capital, the new rules recognize bitcoin as a digital representation of value that can be used as a means of payment and as an investment asset in the South American nation. The bill covers a broad range of a sector it calls “virtual asset” and only requires the President’s signature to become law. The bill does not make any cryptocurrency legal tender in Brazil. It only gives the executive branch the responsibility of selecting government bodies to monitor the market. It is expected that the Central Bank of Brazil will handle bitcoin payments, while the securities and exchange commission of the country (CVM), will oversee investment assets. The legislation was drafted by the CVM and the Federal Tax Authority (RFB). Brazil is home to a vibrant cryptocurrency market. At times, more people trade bitcoins than they invest in the stock exchange. The country now wants to make it easier for people to use bitcoin in their daily lives. The rejection of a clause that would have allowed some states and federal taxes to be reduced on bitcoin mining machines was a major miss in Tuesday’s vote. Although the text was very restrictive, it would only apply to operations that use renewable energy sources. However, it was not enough to be approved. Other provisions include regulation of exchanges and service providers. These service providers will need to adhere to specific rules in order to operate in Brazil. The bill regulates the establishment and operation Bitcoin service providers in Brazil. It defines such entities as those that provide cryptocurrency trading, transfer custody, administration or sale on behalf a third party. The federal government will not allow cryptocurrency service providers to operate in Brazil unless they are explicitly authorized to do so. One rule required that such entities be allowed to separate their patrimony and capital owned by customers. For example, the firm may hold bitcoin for users. This clause was intended to prevent situations such as those that occurred with FTX recently, in which user funds were commingled into company funds. It also helped with the recovery of user assets in case of bankruptcy. It was rejected on Tuesday’s vote.Tagsterms:BrazilRegulationLegalBitcoin Payments


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