An ambitious private member’s bill that seeks to regulate the Brazilian crypto market could be approved by the National Congress before the end of the first half of this year – with MPs set for a key vote on Tuesday next week.
The original bill was authored by Senator Flávio Arns of the Podemos Party and has already passed the Senate. It has also been merged with a second crypto bill that has previously been approved by the Senate Economic Affairs Committee. The second bill was authored by Senator Irajá Abreu.
Globo reported that Congress hopes the merged bill will be passed by June, and Abreu was quoted as stating:
“By uniting the [bills], we have accelerated the approval of this cryptocurrency milestone. There is a market demand for a more secure business environment and the need for criminal classifications that will seek to prevent fraud. [This] will also bring Brazil up to speed with international agreements [on crypto regulation].”
The bill proposes creating a “registry” of politicians and public servants to help fight crypto-powered money laundering.
Not everyone appears to be happy with the bill’s rapid progress through the legislative system, however. Some Senators have called for more time and wider consultation prior to a vote.
But its architects stated that there would be room for “improvement” at a later date. Instead, they claimed that both market participants and the Banco Central (the central bank) had joined calls for faster regulatory rollouts.
The terms of the bill seek to define cryptoassets as “a type of fully digital money that is issued by private agents, sold exclusively through the internet.”
The bill makes it clear that while coins would not be considered illegal, they clearly “operate outside the rules of business and the Brazilian financial sector” – with jail terms mandated for new crypto-related fraud offenses.
As such, crypto exchanges and brokerages will be regulated, but not to the point that free “enterprise and competition” are compromised, the authors claimed.
As has been the case in many other countries, crypto exchanges – as well as brokers and wallet providers – would be obliged to separate their own and their customers’ assets, manage risk, guarantee the security of sensitive customer data and answer to a regulatory body appointed by the government.
But, critically, the architects have spoken of creating a “simplified procedure for obtaining operating licenses” – a suggestion that they want to avoid situations, as has been the case in nations like Japan, whereby firms are forced to wait months for their license applications to be considered.
The bill also includes a number of incentives for crypto miners, including import tax breaks for mining hardware importers.