Brazil has emerged among the first nations now, that has officially outlined the rules and laws to govern the virtual digital assets sector. Jair Bolsonaro, the President of Brazil has signed the previously proposed crypto bill into a law. The parliament of Brazil had given this draft crypto ruleset a nod of approval in November. Starting now, all the crypto players operating in the Latin American nation will have 180 days to ensure compliance with these new guidelines.
Brazil is likely to get a new, internal committee that would maintain an oversight on all the crypto activities being processed in the country. Upcoming crypto firms that aim to set up shop in Brazil, will also have to now obtain a relevant ‘virtual service provider’ licence to legally operate there.
Under the laws, once the crypto firms bag their approvals, they will be able to establish physical offices in Brazilian cities, said a report by CryptoPotato.
Changpeng Zhao, the CEO of Binance crypto exchange called Brazil’s step a ‘major’ milestone in the global crypto sector.
“Another great move that brings more credibility to this industry, improves user protection and targets mainstream adoption,” Zhao wrote in a Twitter post.
New law sets guidelines for how crypto exchanges operate in Brazil. This is a major step towards strengthening the crypto ecosystem.
Another great move that brings more credibility to this industry, improves user protection & targets mainstream adoption.https://t.co/aPaV3vs0M8
— CZ :large_orange_diamond: Binance (@cz_binance) December 22, 2022
The laws aim to protect the investors against being financially defrauded as the crypto sector is riddled with scammers, and at large, crypto transactions are untraceable.
The new laws instruct Brazil’s law enforcement units to create a new category under the ‘crime of fraud’ that would deal with crypto-related financial scams.
Violating the law of the land could send notorious actors into prison for four to six years along with a hefty fine, Coindesk noted.
Brazil is taking active steps to hop onto the crypto bandwagon earlier than other countries.
In May, Nubank, Brazil’s largest digital bank by market value, began offering Bitcoin and Ether to be bought or sold on its platform. Nubank’s decision was fuelled by the rising number of crypto investors there.
Bitcoin, and stablecoin Tether are the two most popular cryptocurrencies held by Brazilian organisations, the RFB had claimed in its findings two month ago.
Brazil’s Rio de Janeiro announced that starting 2023, it would allow its residents to pay property taxes in the form of cryptocurrencies.
Canada, India, the UK, and the US are also all working on their respective crypto rules that may see the light of the day in the coming year.