Brazil Takes First Step To Regulate Bitcoin

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Brazil Takes First Step To Regulate Bitcoin – A bill to govern the day-to-day use of bitcoin in financial transactions was unanimously passed by the Senate’s economic affairs committee.

The Brazilian Senate’s Economic Affairs Committee (CAE) passed a measure on Tuesday to recognize and regulate the cryptocurrency markets in the country, according to an official statement.

CAE’s approval of PL 3825/19 – a bill authored by Senator Flavio Arns in 2019 but crafted in collaboration with the central bank, federal tax authority, securities exchange commission, is a first step toward a bill that aims to establish ground rules for the everyday use of bitcoin in financial transactions and as an investment asset.

Also Read: Fed Bans Senior Officials From Cryptocurrency Investing

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Tax incentives for bitcoin mining are also included in the measure. Import taxes, as well as other transaction taxes that effect local sales, would be waived for businesses that purchase hardware and software for the mining, processing, or preservation of cryptocurrencies. The tax benefits, however, would only be available to enterprises that use renewable energy sources solely and are carbon neutral.

The bill aims to regulate the establishment and operation of Bitcoin service providers in Brazil, describing them as companies that provide bitcoin trading, transfer, custody, administration, or selling on behalf of a third party. Only once the federal government has given its official approval will cryptocurrency service providers be allowed to operate in the country.

Also Read: Crypto Lender Nexo Terminates Interest Payments on New Deposits From US Clients

Senator Iraja Abreu, the draft’s rapporteur, told Bloomberg by phone on Monday that he expects the central bank to be in charge of regulating businesses that provide cryptocurrency-related services in Brazil, though the bill states that the government will appoint which institution will be in charge.

In a statement, Iraja stated that the “CVM should only deal with situations in which digital assets are used to raise funds in financial markets.”

According to a newly submitted request for it to be handled concurrently with a second Bitcoin-related bill, the bill is scheduled to go to the Senate floor next. The measure would then go to the House of Representatives for a vote, which is the final step before President Jair Bolsonaro considers signing it into law.

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