Brazilian Lower House Approves Long-Pending Crypto Law
The Chamber of Deputies i.e. Brazilian Lower House was considering a law pertaining to digital currencies/assets which was numbered ‘4.041/2021’.
In its recent session, held on 29th November 2022, the Chamber of Deputies approved.
The law was pending approval since 2021 and several times deliberations and decisions were postponed mainly because of general elections.
In the sessions, Deputies arrived at a consensus that they would first deliberate upon the amendments proposed by the Senate. They agreed that the specific rules shall be discussed and framed later.
With this consensus, Deputies were able to approve the law with the aim that the rules shall be defined later on.
Bill Mover’s Statement
The draft bill of the law was submitted by Deputy Expeditto Neto who argued that it was imperative to implement the law in Brazil.
Neto staged that deputies shall cast their vote on a historic document. He explained that the world is now ahead of Brazil as it has come to realize that regulating digital currencies and assets is necessary.
He claimed that by passing the law, Brazil will walk with the rest of the world. He further asserted that the proposed crypto law enjoys the support of present and upcoming governments.
Objections to the Law Proposal
A minority of deputies in the Chamber of Deputies however objected to the passing of the law. They pointed out that decisions on an important law should not be made in haste.
They urged that the matter be deferred so that the decision can be made later by the newly elected government.
The newly elected government, led by Luis Inacio Lula Da Silva, is scheduled to take over control by 1st January 2023.
Important Provisions in Crypto Law
One of the issues deferred by deputies was taxing the mining industry to carry out operations by consuming green energy.
Neto proposed that the taxation with regard to mining operations can be deliberated upon and debated later through a separate bill.
However, the issue pertaining to ‘customer asset segregation’ was duly debated and deliberated upon.
Senate had proposed that responsibility should be put on crypto trading and custodial platforms for segregating customers’ funds from theirs.
Several deputies voted in favor of the proposal and argued that by doing so customers can be saved from incurring losses. They also referred to `the FTX’s fall in support of their argument.
However, the argument raised in favor of the segregation of customer funds was rejected.
Instead, the anti-segregation argument was accepted which suggested that crypto platforms would then be able to provide ‘spot-based’ products only.
Brazilian Crypto Law Future
Since now the law has been duly approved, a new chapter for crypto service providers has been opened in Brazil. As per the law, the local crypto industry and service providers shall now be regulated under strict oversight.
Though the oversight authority hasn’t been identified yet the probability is that the country’s central bank would do the job.
Cryptocurrency Adoption in Brazil
Brazil has emerged as a nation that is highly attracted to cryptocurrencies. The country has been moving toward the cryptocurrency industry for a while and the public seems to be very fond of them.
In recent years, multiple local cryptocurrency exchanges have been launched in the country. It is quite remarkable that each cryptocurrency exchange has witnessed a great amount of user-base.
This goes to show that the people in Brazil are adopting cryptocurrencies as they consider them to be a way to circumvent inflation.
The country is badly struck with high inflation rates and the locals are finding cryptocurrencies to be a safe haven during these difficult times.
Therefore, it is important for the government and the regulators in the country they must realize how important cryptocurrencies are for their locals.
It is obvious that the country wants to gain access to cryptocurrencies and the authorities in the country have to make it happen.