As per a recent report, Brazil is looking to make the Central Bank in charge of regulating Bitcoin and related issues. The report also said that Senator Irajá Silvestre Filho, the rapporteur on three Bitcoin-based projects, “gave a favorable opinion to the proposals on the rules of the cryptocurrency market to the Committee on Economic Affairs (CAE) last week.”
Brazil sitting with a crypto bill
These proposals give new value to cryptocurrencies by considering them actual currencies and, as a result, are liable to be regulated by the Central Bank of Brazil. However, the novel feature in the proposal that needs to be highlighted is related to cryptocurrency mining.
As per the report, that proposal states that the individuals or firms that import machinery related to cryptocurrency mining and carry out the process using renewable energy are completely exempted from taxes.
The report comes at a time when the cryptocurrency usage and investment in the nation is reaching an all-time high and making records.
Central Bank as a crypto regulator
Brazil might be on the road to adopting cryptocurrencies by recognizing them as actually monetary currencies rather than commodities. But, the catch is that the Central Bank will be the main regulator of the market. Furthermore, Brazilian Securities Commission ( CVM ) will also be involved in regulatory issues which involve the position of these blockchain-based assets as securities.
“The main point of the proposals is to make the process transparent for the client and the supervisory body, in addition to focusing on combating money laundering crimes — a constant concern when it comes to cryptocurrencies,” said the Dec 4 report.
Furthermore, one of the PLs also indicates that the acceptance of cryptocurrencies as actual currencies in Brazil, which means that cryptocurrency exchanges operating in the country will be able to offer financial services like loans as well. However, authorities are also planning to implement stricter penalties for crimes.
Currently, cryptocurrencies are considered a commodity in Brazil, similar to oil, coffee, and iron ore. Furthermore, as per the report, Binance, the world’s biggest exchange, made a statement, asking the regulatory authorities to “understand and observe the market dynamics, so as not to create “unnecessary bureaucracies or stings to innovation.”