With time, bitcoin has proved its potential to the world. While many countries have already regularized bitcoin and other cryptocurrencies, Brazil has taken the first step as well to introduce bitcoin and crypto regulations in the country. The initiative coming forth at this time of the year is due to Brazil’s president of Chamber of Deputies, Deputy Federal Rodrigo Maia, who ordered formation of a special commission to handle matters related to regularization of digital cryptocurrencies. Particularly, the commission ordered by the president will be working on a bill, 2303/2015, that aims to regulate bitcoin and other cryptos.
The Chamber of Deputies, a federal legislative body, is the lower house of the National Congress of Brazil. Operating since May 6, 1826, the Chamber of Deputies of Brazil is comprised of 513 deputies. These representatives are elected after every 4 years.
The Chamber supervises economic and social aspects of different sectors such as education, transport and health, by discussing and approving proposals related to the aforementioned sectors. Recently, under the leadership of Rodrigo Maia the chamber has decided to create a special commission 34 members, in accordance with the House Rules of Procedure.
In 2017, the Brazilian Central Bank separated itself from bitcoin and cryptocurrencies by issuing statements to the general public, where the bank claimed that cryptos were not supervised, regulated or licensed to operate by the Bank. The central bank explained the risks of bitcoin and altcoins by stating that those are neither issued nor guaranteed by any monetary authority.
Besides the bank, the Brazilian Securities and Exchange Commission (SEC) also disapproved bitcoin along with other cryptocurrencies. According to the SEC, bitcoin and other cryptos were not capable of being regarded as financial assets so it was advised to managers of investment funds to refrain from bitcoin and other digital currencies until they were legalized in the country.
At the moment, bitcoin is not regulated by the country but the tax authorities have imposed gains tax on all cryptocurrencies. Earlier this month, the Brazilian Internal Revenue Service (IRS) passed a new rule that bounds all crypto investors to report transactions above threshold R$ 30,000, on a monthly basis to IRS.
After the law comes into effect in September 2019, all bitcoin and crypto investors will be required to share all details about transactions carried out with exchanges in Brazil, abroad or in peer-to-peer negotiations, with IRS. Similar to cryptocurrency users, the exchanges will also be obliged to report monthly the balances of their users to the IRS.
One of the latest countries struggling to devise a framework for cryptocurrencies, Brazil has been laying focus on the cryptocurrencies and the underlying technology, blockchain. In addition to the chamber, the Brazilian Association of Crypto and Blockchain (ABCB) was also active recently. The president of ABCB, Fernando Furlan, met with IRS, central bank and SEC to discuss the future of blockchain and cryptocurrency developments in the country.
Apart from this, the implementation of rules outlined by the Financial Action Task Force (GAFIT / FAFT), an intergovernmental organization that aims to minimize money laundering, on crypto coins was also under discussion. As of now, the rules are not revealed but in the upcoming G20 forum, scheduled to take place in Japan, the rules will be disclosed after being finalized with the consensus of G20 members.
While it all started with France offering regulatory expertise to other countries, the acceptance and adoption of bitcoin and other cryptos aren’t restricted to Europe only. The growth of bitcoin popularity has even expanded to the South American region when Chile, against all odds, introduced a bill to regulated all cryptocurrencies. Now another South American country, Brazil, is attempting to utilize the use cases and application of bitcoin and other blockchain based currencies.
As more and more developments are taking place on a daily basis, mass adoption of bitcoin is accelerating at a good pace. In addition to the market that has been staying green, crypto enthusiasts are hopeful that events like G20, where several nations will meet to discuss regulatory actions on the cryptocurrency framework, will result in favorable and prospective future for bitcoin and other cryptocurrencies.