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Brazil Slowly Moves Towards Crypto Regulation

Brazil Approves a Crypto Project and Slowly Moves towards Regulation

The bill provides for a tax break for mining companies that use renewable energy.

The Committee on Economic Affairs (CAE) of the Brazilian Senate approved a bill to recognize and regulate the crypto market in the country. This is a project developed by Senator Flavio Arns with various government agencies, which seeks to standardize certain basic rules for the use of bitcoin (BTC) as a means of payment or alternative asset.

In the creation of the document, the Central Bank of Brazil interceded with the Securities Market Commission (CVM) and the Federal Fiscal Authority (RFB). The largest economy in South America seeks to stay at the financial forefront in the region, and in recent years has seen a substantial increase in the use of digital assets in its territory.

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The initiative -according to the official statement- marks that the bitcoin mining industry will have some “tax incentives” to attract new investments in the country and promote the use of renewable energies. Hardware, software, and cryptocurrency mining companies that use only green energy sources will have no import taxes, and some will be removed from local sales as well.

“The intention of the project is to stop or restrict illegal practices, such as money laundering, tax evasion and many other crimes in this segment. There is a market that is lawful, legal, which is the vast majority of this market, but there are exceptions”, explained Senator Irajá Abreu in full session.

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Cryptoactive trading companies are not subject to regulation or control by the Central Bank or the Securities and Exchange Commission (CVM), which makes it difficult for public authorities to identify suspicious transactions.

On the other hand, the legislation also proposes the mandatory nature of a government authorization for those “crypto service providers” (active trading, transfer, custody, administration or sale companies).

At the legislative meeting, proponents of the project pointed out that nearly 3 million people are registered on exchanges operating in Brazil.

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