Brazilian government clarifies bitcoin law with new decree
The Brazilian government is expected to issue a decree that will change some of the rules of the Bitcoin Law approved by former President Jair Bolsonaro in November 2022. This move is in line with recent developments made by President Lula da Silva over the past few weeks.
Brazil faces new crypto regulations
Barely a month in office, the new president has demonstrated his authority by signing a series of decrees and measures designed to change what the previous administration had set out to do.
Lula’s team is now working on new proposals to regulate the cryptocurrency sector and clarify existing crypto laws. Accordingly local reportsThe government has formed a sizable group to oversee the regulation, including Treasury Executive Secretary Gabriel Galípolo and Economic Reform Secretary Marcos Pinto.
In addition, the regulation has the technical support of the Central Bank (BC) and the Brazilian Securities and Exchange Commission (CVM). The initial expectation was that the decree would be sent to the Presidency of the Republic known as the Casa Civil in early February, but this was postponed.
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Meanwhile, the cryptocurrency industry awaits the decree, likely with more attention paid to the institution that will be the primary regulator of the Bitcoin ecosystem. It was previously mentioned that the central bank would be the body in charge of regulating the cryptocurrency sector. However, Lula’s recent attacks on the financial institution have raised some doubts.
Last month, the Brazilian president questioned whether central bank autonomy was in the national interest. Although he later seemingly withdrew it, he hinted that he would review his independence to make decisions from 2021 onwards.
What changes are planned for the Brazilian bitcoin law?
The core of the new regulations would be the drafting of new rules regarding various facets of the crypto industry. There is an expectation that the new decree would clarify the laws regulating the crypto industry in Brazil.
A much-discussed proposed law involves requiring crypto exchanges and brokers to segregate their assets. This measure has been the subject of discussions by lawmakers and suggests that crypto asset brokers segregate their funds from customers’ deposits.
Proponents of the regulation believe it would prevent users’ cryptocurrencies from being meddled into the operations of exchanges and other service providers. The collapse of FTX is cited as a major factor in which users were unable to withdraw their funds from the exchange due to harmful trading activities.
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The proposal was initially accepted when the bill passed the Senate, but was later canceled because it divided House lawmakers. However, it is expected to be an integral part of the proposed Bitcoin decree.
Brazil is considered to be one of the nations with widespread crypto usage. It took a significant step last November when it recognized bitcoin as a means of payment and even as an investment asset.
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