Brazil is on its way, preparing to enact a comprehensive regulatory framework for cryptocurrency. Lawmakers are to press for the draft proposals to be legislated within the first half of this year. Enactment of this law would put Brazil on the list of Latin American countries welcoming cryptocurrency on the governance level.
Implication for crypto in Brazil
House bill 4401/21 aims to establish an agency to monitor the cryptocurrency industry in Brazil. This body would be authorized to govern the activities of crypto service providers, such as exchanges.
The regulations encompass legislating against criminality pertaining to digital assets. Those taking the illicit route via cryptocurrency will face four to eight years in prison along with a heavy penalty.
Further, in what the world would consider a progressive move in favor of industry players, the bill also exempts “legal entities” from some taxes on activities related to “processing, mining, and conservation of virtual assets.”
Also Read: Government Of USA Passed A Bipartisan Bill To Modify A Provision In Infrastructure Law Dealing With Crypto Tax
Plans for the second half of 2022
In a separate instance, Roberto Campos Neto, president of the Central Bank of Brazil, disclosed Brazil’s plans for a central bank digital currency during an event presented by TradersClub (TC) and Arko Advice on Apr. 11. Neto hinted at a probable pilot for the country’s CBDC is to take place in the second half of 2022.
He also said that the Central Bank is neck-deep in the process leading to the creation of CBDC. However, the upcoming phases of the project will increment the bank’s knowledge exponentially.
No clarity was, however, offered on whether the pilot will involve the participation of the public or restrict its operations to the bank itself.
Neto also made a statement on the growing popularity of cryptocurrency, commenting that he believes there is “no central bank in the world today that is not in this process of studying a digital currency.”
Also Read: Can Crypto Help in Rebuilding a War-torn Nation?
To sum up
Here are some high-frequency activities detected on the Latin American cryptocurrency lines. One, in the legislation recognizing crypto as an asset and second in the pilot launch of the nation’s CBDC.
Evidently, Brazil is taking its crypto journey seriously, identifying considerable prospects from it. It is about to be a case study of how much crypto impacts an economy as large as Brazil.