A new cryptocurrency law was approved by the Chamber of Deputies of the Brazilian Congress last week and is now awaiting review by the Senate for approval. The project, if approved, would establish a central body to regulate all cryptocurrency brokerage activity – allegedly the Brazilian central bank – and establish new penalties for crypto-related crimes.
Chamber of Deputies passes new crypto law in Brazil
The Chamber of Deputies of the Congress of Brazil has approved new draft law to bring clarity to cryptocurrency regulation in the country. Identified as Bill 2303/15 and proposed by Deputy Aureo Ribeiro, the project lays down definitions for exchanges and virtual currencies. It also requires a central body overseeing all cryptocurrency-based operations that is appointed by the executive branch of the government. The draft law is now to be submitted to the Senate, which will ultimately decide whether it will be passed.
The regulation does not name crypto currencies, but instead uses the term “virtual currencies”. However, the project makes it clear that it has no impact on the digital representation of the national fiat currency (the real), other international currencies or the reward points of some companies in advertising campaigns. A virtual currency is defined as a representation of value that can be used electronically for payments or for investment purposes.
Harsher penalties and a central regulator
The text contains specific penalties for cryptocurrency crime and sets a new penalty for exchanges or parties that illegally manage cryptocurrency portfolios for third parties. This crime is classified as a form of embezzlement and could be punished with four to eight years in prison and fines.
Although the draft law provides for a central regulatory authority, it cannot explicitly name it for legal reasons. However, Expedito Netto, the rapporteur for the commission that carries the law, said that this body will likely be the country’s central bank.
If approved, Brazil would join a group of countries in Latam that have specific rules for cryptocurrency investments that are classified differently from other, similar investments. El Salvador is one of those countries that recently approved its so-called “Bitcoin Law”. Definition Bitcoin as legal tender in the country.
Paraguay has also taken steps in this direction, introduce a bill to regulate cryptocurrencies in July. However, the legislation aims to put controls in place on crypto transactions and sees Bitcoin not as a currency but as a commodity.
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Source: Crypto News Austria