Does Brazil’s crypto bill make it the new El Salvador?
The president of Brazil, Jair Messias Bolsonaro, has signed a crypto regulation bill into law, just days before he leaves office.
Bolsonaro signed the bill after it passed through Brazil’s Senate and Chamber of Deputies. It will likely take effect in June 2023.
The law will establish a crime of fraud involving virtual assets, which can result in between four and six years in jail and a fine.
In addition, crypto firms will have to register in the country and then be allowed to establish physical offices. This will include businesses that offer crypto financing services or crypto exchanges.
The new law also creates a “virtual service provider” licence, which crypto companies will have to apply for.
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The Brazilian Securities and Exchange Commission
Under the law, cryptos that are considered securities will fall under the regulatory umbrella of Brazil’s Securities and Exchange Commission.
However, Bolsonaro did not say which federal agency would be in charge of supervising cryptocurrencies that are not deemed securities.
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Is Brazil the next El Salvador?
In September 2021, El Salvador made bitcoin (BTC) legal tender in the country. In Brazil, the new bill does not allow for BTC to be used as legal tender in the country, however, it will place certain cryptos under a definition of legal payments.
Bolsonaro will spend his last day in the office of Brazil’s president on 31 December, after which Luiz Inácio Lula da Silva will take over as president from 1 January 2023.
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