The Brazilian Chamber of Deputies has passed a cryptocurrency bill that had been under consideration for several months after making certain amendments suggested by the Senate.
The plan failed to address the issue of separating customer assets from business finances for virtual asset service providers, as well as two anticipated tax exemptions for green mining operations (VASPs).
Brazil Finally Approves Cryptocurrency Law
The Chamber of Deputies approved the cryptocurrency law project with the reference number 4. 041/2021, during its meeting on November.
29. President Jair Bolsonaro will now need to ratify the law project, whose discussion and approval were repeatedly delayed due to the general elections held last month.
who must sanction it before declaring it law
The majority of the Senate’s suggested revisions were rejected by the deputies, allowing the bill to be enacted in a more broad form and creating the possibility for eventual formulation of more detailed provisions.
According to local media reports, the discussion of the law was hurried because it was unclear what position the administration of president-elect Luis Inacio Lula Da Silva would take on the issue. Some deputies claimed that the bill might encounter opposition with the new administration, which is scheduled to take office on January 1.
The planned tax reduction for bitcoin mining businesses that use renewable energy in their operations was omitted from the final agreement.
The project’s rapporteur acknowledged that another measure pertaining to this issue should specify tax-related rules.
This was one of the main topics of discussion, and many deputies backed it so that users could prevent losing money like what happened when the popular cryptocurrency exchange FTX recently collapsed.
Analysts who supported the anti-segregation position claimed that not using customer funds to operate could constrain the portfolio that brokerage firms and other businesses in the region could offer, limiting them to providing spot-based trading products.
With the approval of the cryptocurrency law, the government can now begin to regulate VASPs and other businesses that utilize cryptocurrencies in the nation. This regulator will be chosen by the executive and may be the Central Bank of Brazil or another particular institution.
Many analysts think that this is just the beginning of the regulation, and they anticipate that in the coming years, the law will start to be applied and more specific rules will start to emerge.