Virtual currency laws. It was approved by the Brazilian House of Representatives after withdrawing some of the changes proposed by the Senate. The proposal ruled out two planned tax exemptions for green mining operations and the issue of separating customer assets from corporate funds for virtual asset service providers (VASPs).
Brazil’s Final Approved Cryptocurrency Law
The cryptocurrency law project identified by number 4.041/2021 was approved by the House of Representatives in its November 29 session. it was done. The project, whose discussion and approval has been postponed many times due to the general elections held last month, now requires ratification by President Jair Bolsonaro, who said he would approve it before declaring it into law.
Members of the House voted to rescind most of the changes proposed by the Senate, allowing legislation to be approved in a more general The bill’s rapporteur, Deputy Commissioner Expeditto Neto, said the law was important to the country. He said:
We are voting on historical issues. Today, countries are ahead of the curve in regulating activities with digital assets. We have the support of current and future governments on this issue.
According to local media reports, due to the unknown position that the government of incoming President Luis Inácio Lula da Silva will take on the matter, the legal debate is} Hastened.
Asset segregation and other factors excluded
Issues excluded One of the final documents applies to the cryptocurrency mining industry that uses green energy in its business was the proposed tax cut. The project rapporteur recognized that tax-related regulations should be defined in a separate bill on this issue.
Another challenge was the issue of customer asset segregation. This will force virtual asset service providers to separate their customers’ funds from their own. This has been one of the focal points of the debate, and many agents have endorsed it to help users avoid the loss of funds like the one seen in the recent collapse of major cryptocurrency exchange FTX. .
The anti-segregation side prevailed. Analysts say that not leveraging client funds in operations could limit the portfolios brokers and other firms in the region can offer, limiting them to spot offerings based on trading products. . For now, the regulation of these products and the types of guarantees these companies should offer their users will have to be defined on a case-by-case basis by regulators.
Future Implications
The approval of the Cryptocurrency Act will be the starting point for regulation of his VASPs and other companies using crypto in the country. Appointed by executives of the Central Bank of Brazil or other specified institutions.
Many analysts believe this is only the early stages of this regulation, and expect legislation to begin to be enforced and specific rules to be enacted in the coming years. This is the opinion of Warde Advogados partner Isac Costa, who declared :
that perhaps the law would not come into force in practice. will take up to 2 years. We believe that acknowledgment is merely a symbolic act.
This is because the bill was approved in a very general directive and should be further developed in subsequent bills. However, according to digital law attorney Marcelo Castro, the bill establishes a foundation that will help “subsidize future extralegal regulation.”
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