Brazil takes lead
The President of Brazil, Luiz Inacio Lula Da Silva (AKA Lula) has taken the bold step towards a clear path to crypto regulation in Brazil.
The president signed a decree into law that clarifies the role of the country’s Central Bank and its securities regulators
Brazil enacts clear crypto law
Brazilian President, Lula, on June 14 signed a government decree No. 11.563 that establishes the rules based on the December 2022 law on a legal framework for crypto in Brazil.
The decree creates a segmentation of the powers assigned to the Central Bank and other regulators. The Central Bank of Brazil will regulate and supervise virtual asset service providers. Comissão de Valores Mobiliários (CVM), Brazil’s equivalent of the U.S. Securities and Exchange Commission (SEC), will be responsible for the regulation of tokens.
The decree will come into effect on June 20 without impacting the effect of certain laws on consumer protection and financial crimes.
Preventing money laundering and terrorism financing in the crypto space is a crucial aspect of the law. To address these issues in the crypto world, the law has enforced strict requirements. Breaking the established regulations could have serious repercussions, including imprisonment.
Brazil incorporates comprehensive safeguards against unlawful activity in order to provide a safe and open environment for digital currency transactions.
The law isn’t perfect
The law comes to light at a time when the SEC in the US has waged a scorched earth regulatory battles against top crypto exchanges operating within its borders.
However, the Brazilian attempt fails to segregate assets on crypto exchanges to prevent the comingling of customers’ assets as was prominent in the FTX case. The law also doesn’t define what securities are in the purview of digital assets.
Notwithstanding, the law is a welcomed innovation in helping to shape what the crypto industry should look like in the near term. It also helps Brazil strengthen its control over its Central Bank digital currency, the digital Real.
Brazil is home to the largest cryptocurrency exchange in South America, Mercado Bitcoin, and it has authorized foreign payment companies like Crypto.com and Bitso. Brazilians can now buy cryptocurrency thanks to a partnership announced in March between local businesses and American cryptocurrency exchange Coinbase.
Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.