The Brazilian government recently adopted a major law on the governance of the cryptocurrency market. Published in the country's official magazine on June 14, the law will take effect in six days.
The Brazilian Central Bank (BCB) is tasked with overseeing the industry and setting rules that virtual asset companies must follow. These companies must obtain a permit from the BCB and comply with anti-money laundering and counter-terrorist financing regulations.
The law defines virtual assets as "a digital expression of value that can be transmitted, stored or traded electronically". Virtual assets are not accepted as legal tender or securities, but may be used for payments or investments.
Brazil's Ministry of Economy has initiated a legislative framework involving the crypto industry and the public. The main purpose of this legislation is to guarantee a safe and clear environment for the development of the cryptocurrency sector in Brazil; it also protects buyers and investors.
In Latin America, Brazil is a particularly dynamic country when it comes to cryptocurrencies and their use. In 2021, approximately one in five Brazilians reported having or using crypto assets for payments. Furthermore, Brazil has many large exchanges, such as Mercado Bitcoin, Bitso and Foxbit, receiving millions of customers and generating high trading volumes.
The Brazilian government has not yet developed a clear and consistent position on virtual assets. Different governing bodies have different views and perspectives. The Brazilian Central Bank has stated that virtual currencies are not recognised as legal tender and therefore are not subject to supervision. On the other hand, the Brazilian Securities Commission considers some digital currencies as securities and requires cryptocurrency funds to complete the necessary paperwork and comply with disclosure rules. In addition, the National Council of Financial Policies imposed a 15 percent tax on any profits made from cryptocurrency trading.
