Senate Committee Approves Proposal for Rules and Uses of Cryptocurrencies

Last Tuesday (23), the Senate Affairs Committee (CAE) approved a proposal that recognizes and regulates the cryptocurrency market in Brazil. The idea is to create a regulation to encourage, stipulate good practices and offer more security to these digital assets in the country.

This is because the cryptocurrency market remains without supervision or oversight by financial system bodies. By contrast, nearly three million Brazilians are registered with digital currency exchanges — about two million fewer than the number of investors on B3, the Brazilian Stock Exchange.

“Crypto asset trading companies are neither subject to regulation nor to the control of the Central Bank or the Securities and Exchange Commission (CVM), which makes it more difficult for the public authorities to identify suspicious transactions”, pondered Senator Irajá Abreu (PSD- TO), who presented a replacement text for three initial proposals suggested by Soraya Thronicke (PSL-MS), Styvenson Valentim (Pode-RN) and Flávio Arns (Pode-PR).

What does the proposal say?

The substitutive text brings rules and guidelines for the provision of services related to digital assets and for the operation of brokerages. The proposal considers as a provider of virtual assets services the company that performs, on behalf of third parties, at least one of the following services:

  • redemption of cryptocurrencies (exchange for sovereign currency ex: real, dollar);
  • exchange between one or more cryptocurrencies; transfer of virtual assets;
  • custody or administration of these assets or instruments for controlling virtual assets;
  • participation in financial services related to the offering by an issuer or the sale of virtual assets.

Regarding regulation, the text understands that the crypto-asset is not a security and, even because of that, it is not subject to inspection by the CVM – the body responsible for supervising the stock market. The exception is valid only for cases of public offering of crypto-assets to raise funds in the financial market.

Approval took place at a CAE meeting last Tuesday (22) – Image: Edilson Rodrigues/Agência Senado

Therefore, the Executive Branch will be responsible for defining bodies that must regulate and supervise operations with cryptocurrencies, provided that the following points are considered:

  • promote free enterprise and competition;
  • enforce control and separation of customer resources;
  • define good governance and risk management practices;
  • ensure the security of information and the protection of personal data;
  • protect and defend consumers and users and popular savings;
  • ensure the soundness and efficiency of operations.

Other points raised in the proposal include operating licenses, sanctions to prevent irregular operations and brokerage scams, the suggestion that these companies be considered financial institutions, tax exemptions and policies to strengthen the security of the sector.

Brazil close to cryptocurrency regulation

It is worth noting that the approval of the proposal by the Senate Affairs Committee was final. If there is no recourse for a vote in plenary, the text may go straight to the Chamber of Deputies.

Source: Brazil Agency

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