Brazil’s Senate Committee Approves Cryptocurrency Regulation Bill

Who has taken another step toward regulating bitcoin use? Brazil certainly is. The Senate Committee on Economic Affairs, more precisely the Committee on Economic Affairs, reached an agreement on a measure. Its objective is to regulate digital currency transactions in Brazil.

To become legislation, the measure must first pass the Senate plenary and then the Chamber of Deputies. If the legislation clears those two hurdles, it takes effect 180 days after publication.

Even while regulation seems to be a long way off, it’s worth noting that the bill began its trip only five months ago. When the whole world believed its stated objective was to make bitcoin legal money, NewsBTC employed internet translators to get to the bottom of the matter. We cited Brazil’s foremost bitcoin journalist Saori Honorato at the time about the bill’s future:

“Last week, a special committee of the Chamber of Deputies passed the measure, which now moves to the Chamber’s Plenary. If deputies agree, it passes to the Senate for further discussion and, if approved, to the president.”

And see how far it has come, even reaching the Senate. It’s worth remembering that the President of Brazil retains the authority to veto the law at any stage. As Portal Do Bitcoin reports, there are, nevertheless, substantial grounds to assume he supports the bill:

“Flávio Bolsonaro (Liberal-RJ), the son of President Jair Bolsonaro, was one of the senators who voted in favour. This demonstrates that the Chief Executive must support the Senate measure.”

Why Is Brazil Pushing For A Cryptocurrency Bill?

Alternative versions of the law suggested that cryptography be overseen by two entities. The Central Bank of the United States and the Federal Revenue Agency dubbed the tax collectors. The authorised version has a different concept. “The Executive Branch will be in charge of determining which entities would regulate and monitor cryptocurrency transactions.”

Additionally, the Executive Branch will be responsible for permitting crypto-related businesses to do business in Brazil. If such businesses become aware of a suspicious transaction, they will be required to notify the Financial Activities Control Council. Particularly if it involves money laundering.

According to Portal Do Bitcoin, the bill’s primary objective is to “create laws consistent with international norms to prevent money laundering and asset concealment, as well as to fight the operations of criminal groups.” Additionally, it formalises the definition of some terms, such as “virtual asset.” It is a “digital representation of value that can be exchanged or transferred electronically and is often utilised for payment and investment reasons.”

Additionally, the law defines “virtual service providers” as follows: “A company that performs at least one of the following services on behalf of third parties: the redemption of cryptocurrencies (exchange for sovereign currency); the exchange between one or more cryptocurrencies; transfer of virtual assets; custody or administration of these assets or instruments to control virtual assets; or participation in financial services associated with an issuer’s offering or sale of virtual assets.”

The measure imposes a four- to eight-year prison penalty on “those who commit fraud in the supply of virtual asset services.” Additionally, there is a fine.

Senator Irajá, the bill’s sponsor, pledges in a news release cited by Portal Do Bitcoin: “We’re establishing a regulatory framework to assure security and accountability. The media reported on instances of financial pyramid schemes that harmed businesses and individuals. Since 2019, the cryptocurrency market has more than doubled in size. This accomplishment motivates it to continue developing, but this time in the battle against financial pyramid schemes, tax evasion, and other crimes.”

Also Read: Charles Hoskinson Urges Cryptocurrency Investors To “Zoom Out” In The Face Of Market Volatility