The world’s largest economies can no longer stand against cryptocurrencies. How much longer could they row against the wind? Giant financial institutions such as JPMorgan and BoA, who spewed a grudge against cryptocurrencies in 2017, also gave up their stubbornness and now entered the race to offer crypto-focused investment products to their customers.
Brazilian Senate Takes First Step Towards Regulating Crypto
The Brazilian senate has taken the first step towards regulating the local cryptocurrency market as a bill that establishes ground rules for cryptocurrency funds and has passed an important legislative phase that concerns day-to-day uses. The Senate’s economic affairs committee unanimously approved the text on Tuesday. The bill will now be voted on in the lower house, followed by the Senate floor.
The text starts from scratch by describing cryptoassets and classifying service providers. According to the proposal, the federal government decides which body will be responsible for regulating things with cryptocurrencies. The draft’s rapporteur, Senator Iraja Abreu, said by phone on Monday that he expects that responsibility to fall on the central bank, which is actively involved in the drafting of the bill.
States Are Now Recognizing Cryptocurrencies
If the bill is approved, Brazil will become the largest Latin American country to regulate cryptocurrencies, reducing the potential for money laundering and risks for investors. Some smaller countries in the region have gone further, with Cuba publishing rules recognizing and regulating their use, and El Salvador making Bitcoin legal tender alongside the US dollar.
According to the bill, virtual asset service providers must prevent money laundering and concealment of assets while combating criminal organizations, terrorist financing and the proliferation of weapons of mass destruction. The text brings prison and fines for violations.
The bill’s rapporteur said that the regulation, which was approved today and focuses on investments rather than popular use, creates a conducive environment for more regular use of cryptocurrencies.
“With regulation, cryptocurrencies will become even more popular. Once this regulation is approved, the trend is towards more and more adoption in the supermarket, in the trade, in the car dealership”.
The proposed bill comes as the Brazilian central bank is working on a digital version of the Brazilian real. This project, which aims to encourage investments rather than commercial use, is expected to be piloted in the second half of the year.