The Chamber of Deputies of Brazil approved new crypto adoption regulations on Tuesday to oversee the sector better.
The development comes on the back of the central bank’s promise to lower inflation. Once again on Tuesday, Brazilian central bank director Diogo Guillen stressed maintaining lower CPI levels with the annual inflation rate close to 6.17%.
Crypto Bill Outline
The legislation puts the onus on all crypto exchanges, custodians, and related entities to have a domestic office in the country. According to Deputy Aureo Ribeiro, author of the bill, companies in the sector must obtain a license as a “virtual service provider.”
Any entity that deals in digital assets will come under the scope of the law.
Local media reported citing the bill, that companies have 180 days to comply with the rules. Meanwhile, the new rulebook also outlines heavy fines and jail terms for violations. For instance, all digital asset embezzlements reportedly attract a penalty with a jail term between two and six years.
Notably, the regulation comes weeks after major crypto exchange FTX filed for bankruptcy.
A Crypto Supervisor Will Be Appointed
A government-appointed federal agency will supervise the sector, per the bill.
The proposal states that the country’s securities regulator, Comissão de Valores Mobiliários (CVM), will oversee crypto-assets classified as securities. The Executive Branch will select a different body to manage all other crypto assets. Local media anticipates that the central bank might be the other body.
Securities commission officials stated in October that tokenizing assets does not require prior approval, but public offerings will be regulated.
The Bill Awaits Approval
Senators passed the bill earlier in April, according to reports. However, it hit a wall in the Chamber in June, despite being on the voting lists several times, the paper noted. There were supposedly some contentious sections in the bill that caused the delay. For instance, foreign exchanges like Binance allegedly opposed the separation of investor equity from that of the exchange itself.
Brazil also held general elections on Oct. 2 to choose a president, vice president, and other representatives.
After being stalled for around six months, the bill is now one step away from becoming law. It now awaits the assent of the outgoing President, Jair Bolsonaro.
Meanwhile, Brazil remains a crucial region in crypto adoption both in Latin America and globally. It ranked seventh in this year’s crypto index released by Chainalysis. BeInCrypto recently reported that more Brazilian businesses are embracing cryptocurrencies. The nation saw the highest percentage of institutional ownership of cryptocurrency in August.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.