Legislative mission lays down time-frame for enacting cryptocurrency rules in Brazil

A bill presented to the Brazilian National Congress in June recently came into the spotlight as it sets a fixed period for the executive branch to begin regulating cryptocurrency transactions. If the proposal is approved, it will set the payment of taxes on cryptocurrency-based transactions. The project is appraised by the Chamber of Deputies and has to be finally analyzed by the Finance and Tax Committee.

Cryptocurrency transactions are to be regulated in Brazil

A draft law proposal, Bill 2140/21, presented to the Brazilian Chamber of Deputies in June, is now in the spotlight as it sets a fixed period of time for regulating cryptocurrency transactions for the government’s executive branch. If approved, there would be a 180 day deadline to develop all the structures necessary to effectively regulate cryptocurrency transactions. The project was presented by deputy Alexandre Frota, part of the Partido de la Social Democracia Brasileña (PSDB).

Frota explains that the lack of clear regulation for cryptocurrencies puts investors and the traditional financial system at risk, as crypto can help drive funds out of the country without supervision. Frota stated:

In the case of private and public banks, rigorous regulation and control are necessary so that the population is not deceived with promises of high individual profits, which has largely already happened.

Brazil has been a country known for its crime-related cryptocurrency-related scams in recent years. The state acted swiftly to stop these schemes and organized several operations to close down and arrest those responsible for illegal cryptocurrency-related activities in recent months.

Taxes could come

Another important part of the project is that transactions carried out abroad should be audited according to the same rules as for banks, including taxation norms. However, due to the nature of cryptocurrency transactions, it is still unclear how this could be done. This subject is currently being dealt with by a special committee of the Chamber of Deputies.

However, Brazil is very open to issuing central bank digital currency. The Brazilian central bank is researching the creation of a digital real and is debating whether there is really a demand from the Brazilian population for such an instrument.

What do you think of the regulation and taxation of cryptocurrency transactions? Let us know in the comments section below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

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