• In Brazil, a law project has established a period for deciding on cryptocurrency regulations

  • A law project introduced in the Brazilian National Congress in June has recently gained attention because it establishes a time frame for the executive to begin regulating cryptocurrency transactions. If passed, the proposal would mandate the payment of taxes on cryptocurrency-based transactions. The Chamber of Deputies is reviewing the project, which will need to be thoroughly examined by the Finance and Taxation Committee.

    Brazil Will Regulate Cryptocurrency Transactions

    Bill 2140/21, a law project proposal introduced to the Brazilian Chamber of Deputies in June, is now in the spotlight because it establishes a fixed period for the executive branch of government to regulate cryptocurrency transactions. If approved, it would set a time limit of 180 days to develop all of the necessary structures to effectively regulate cryptocurrency transactions. Alexandre Frota, a member of the Partido de la Social Democracia Brasilea, presented the project (PSDB).

    According to Frota, the lack of clear regulation for cryptocurrencies puts investors and the traditional financial system at risk, as crypto can aid in the movement of funds out of the country with no oversight. Frota stated:

    With private and public banks, strict regulation and inspection are required so that the public is not misled by promises of high individual profits, as has already occurred to a large extent.

    In recent years, Brazil has become known for its crime associated with crypto-related scams. When it comes to putting a stop to these schemes, the government has been quick to act, organizing several operations in recent months to shut down and arrest those responsible for illegal cryptocurrency-related activity.

    Taxes Could Be on the Way

    Another critical component of the project states that operations conducted abroad must be scrutinized in accordance with the same rules that apply to banks, including taxation norms. However, due to the nature of cryptocurrency transactions, it is still unclear how this could be accomplished. A special committee of the Chamber of Deputies is currently working on this issue.

    Brazil, on the other hand, is very open to the creation of a central bank digital currency. The Brazilian Central Bank is investigating the creation of a Digital Real and debating whether there is a genuine demand for such an instrument among the Brazilian people.

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