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The president of Brazil, Luiz Inacio Lula Da Silva, referred to many as Lula, has taken a significant step toward clarifying the regulatory landscape of crypto in the country. Lula has signed a legislation clarifying the roles the country’s central bank and securities regulator will conduct regarding cryptocurrencies.
JUST IN: 🇧🇷 Brazil President signs legislation into law empowering the central bank to regulate the #Bitcoin and crypto industry.
— Bitcoin Magazine (@BitcoinMagazine) June 14, 2023
On Wednesday, the president signed a government decree No. 11.563, establishing rules under a December 2022 law on a legal framework for crypto in the country. The legislation authorizes the Central Bank of Brazil to regulate and supervise virtual asset service providers. Additionally, the regulation of tokens will fall under the purview of Brazil’s securities regulator, Comissão de Valores Mobiliários (CVM), Brazil’s equivalent of the U.S. Securities and Exchange Commission.
This development comes when the United States is brawling with regulatory uncertainty, as the Securities and Exchange Commission (SEC) has taken numerous enforcement actions in recent weeks.
Brazil Approves Comprehensive Crypto Regulations
President Silva has taken a decisive step toward establishing a comprehensive regulatory framework for cryptocurrencies. According to Cointelegraph Brazil, CVM aims to create a regulatory structure conforming to the volume of crypto trades in the country and emerging markets.
Further, the decree authorizes the Brazilian central bank to determine which platforms can operate within the cryptocurrency sector. This move enables the central bank to effectively regulate and supervise crypto companies by ensuring they comply with the established standards. The new regulations are set to be effective on June 20. Nonetheless, the act aims to enhance oversight and security within the crypto market.
There are various features on which the legislation pivots. However, one vital feature is preventing money laundering and financing terrorism within the crypto realm. The law has imposed stringent measures to address these concerns in the crypto space. However, failure to adhere to the set rules might potentially lead to severe consequences, including imprisonment.
Brazil aims to foster a secure and transparent digital currency transaction environment by incorporating robust safeguards against illegal activities.
Brazil’s Bold Steps In Crypto Sector
Brazil is boldly showing its unwavering support for digital currency in the industry. The country’s comprehensive regulatory measures have come in the interim when the country is actively engaging in developing the Digital Brazilian Real, the country’s Central Bank Digital Currency (CBDC) pilot project. Collaborating with significant payment giants such as Visa and Mastercard, the Brazilian government aims to create a federally issued digital currency that can revolutionize the financial landscape.
However, the coevality between Brazil’s regulatory framework and the CBDC pilot project signifies a strategic alignment of efforts. Brazil demonstrates its commitment to fostering a supportive environment for the digital currency industry by jointly establishing clear regulations and exploring the potential of a digital currency.
With one of the largest markets in South America, Brazil is home to the crypto exchange Mercado Bitcoin. It has further licensed foreign payment providers, including Crypto.com and Bitso. In March, U.S. crypto exchange Coinbase revealed its collaboration with local platforms to offer crypto purchases for the people of Brazil.
In conclusion, as Brazil establishes clear guidelines for digital asset development through its newly enacted decree, it positions itself as a jurisdiction fostering innovation and stability in the cryptocurrency ecosystem.
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