The Bitcoin Law in Brazil, what is it about and what are the benefits?
Today I am back after a much-needed vacation to renew my mental energy and relieve some stress. Although of course, events around the world do not rest at all and every day something new comes out that surprises.
Today's big news in Brazil and its Bitcoin law. But, although it sounds very similar to the bitcoin law of El Salvador, where they placed the bitcoin as legal tender, in this case, the Brazilian bitcoin law seeks other objectives or interests such as the creation of specific rules for the trade of crypto assets in the country, this to try to strengthen the control of cryptocurrencies in Brazil, which so far is a very, very large market.
For example, according to data from Chainalysis, Brazil ranks 14th worldwide in crypto adoption, and the annual volume of money that moves the crypto market in Brazil is $200 billion, and as the government and banking center see a huge opportunity in this market, they are implementing a series of regulations focused on the punishments to be met by those who commit financial crimes related to cryptocurrencies. Of course, this bitcoin law will also allow greater use of cryptocurrencies in the Brazilian territory which will lead to greater adoption.
The Brazilian Senate approved yesterday the bill that regulates the cryptocurrency sector, this bill determines that to operate in Brazilian territory, cryptocurrency exchanges must be registered in the Financial Activities Control System, as well as in the National Registry of Legal Entities, of the country's Special Secretariat of Federal Revenue, thus avoiding the illegality of cryptocurrency exchanges, suspicious operations, financial pyramids, white-collar crimes, and money laundering.
The penalties for committing fraud or laundering money with cryptocurrencies can be from 2 to 6 years in prison, although they were talking about establishing penalties of up to 12 years for those who incur crimes that exceed exorbitant amounts, Flávio Arns, Senator of Brazil commented on the penalties that offenders should serve:
"The sentence of four to eight years is very low. The escalation of the penalty should be calculated according to the damage caused. The penalty should be six to twelve years. This would give greater flexibility to judges who should give the penalty to those who harm society by the millions and cause great damage".
So, although this bitcoin law does not mean bitcoin or some other cryptocurrency will be placed as legal tender as they have done in el Salvador. we see that this bill seeks to strengthen the rules and trust of the people by delegating it to the Securities and Exchange Commission or the Central Bank of Brazil.
So the main objective of this bill is to define market guidelines and to establish rules in line with international standards to prevent money laundering and concealment of assets, as well as to combat the activities of criminal organizations. Although it is not ruled out that, due to the success of this project, other reforms may be undertaken in the future, as has been done in El Salvador.
but, although when it comes to regulation it is always for the benefit of an entity or government, some experts in the crypto sector have commented on their approval of this project, for example, Bernardo Schucman, senior vice president of the digital currencies division of the U.S. mining company Schuman mentioned:
Regulation is very welcome to the sector and, consequently, following the regulation of cryptocurrencies in Brazil, the trend is for Brazil to follow the world's largest economies and facilitate the mining of these coins on Brazilian soil, which would be reflected in a greater decentralization of the control of this blockchain that today are processed or "mined" almost entirely in the northern hemisphere in developed countries.
And Andrey Nousi, CFA and founder of Nous Finance commented:
The lack of a legal framework to determine what is financial crime and what is not, using digital assets, ends up impacting the entire ecosystem, where the vast majority of people involved are legitimate and want to do a good job. I consider it a breakthrough for Brazil because it shows the attention that lawmakers are paying to this market, understanding that the country can succeed a lot.
As we can see, these measures can greatly benefit the crypto sector and can make many mining companies or large exchanges decide to invest in Brazil, thus strengthening this sector in the Latin American region. In addition, the regulations may also give more confidence to traditional institutions and businesses in the Latin country to adopt cryptocurrencies to a greater degree, which would make trading flourish.
But what do you think, do you think the regulations that could be implemented in Brazil through the bitcoin law will strengthen the crypto sector or hurt it?
let me know your opinion in the comments, thank you very much for reading.
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These kinds of regulations are necessary for the mass adoption from bigger companies, these are good news IMO.
Brazil could be the 14th country in crypto adoption, but NFT games are full of Brazilians haha
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