Crypto contradictions: how regulations are moving adoption in Brazil
The largest country in Latin America and 5th biggest in the world, Brazil has always been plagued by corruption and inefficiency. Crypto ecosystems may help – if only regulations will let it.
- Brazilian-style regulatory approach
- Death and taxes
- The other side of certainty
- Backlash from entrenched powers
What does the future hold?
This is part of a series of stories on crypto regulation and worldwide adoption by the Cloudbet blog. To learn more, check out how regulations are shaping adoption in Africa, and the curious case of crypto in India.
Brazil is a land of contradictions, notorious for having a disgruntled, patchwork-style legislative framework – a trait that generates confusing, intertwined norms that in most cases lead to a structural delay in innovation. In this context, the various administrative bodies that make up the national financial regulators finally began following the rest of the world in their mission towards the regulation of cryptocurrency usage. However, like most things in the country, this has been a path ridden with contradictions and uncertainty.
After bitcoin overcame the deep web and underworld currency-shilling, finally overcoming the borders of Silk Road and media sensationalism, the first Brazilian cryptocurrency exchange emerged in 2011, remaining in operation up to this day. Many other exchanges have popped up ever since, contributing to the dissemination not only of BTC and altcoin markets but also of a whole budding crypto ecosystem.
After the 2016-2017 crypto markets boom, the governments interest also peaked, spurring political and regulatory action in its wake.
Brazilian-style regulatory approach
Since then, Brazilian regulatory bodies have begun to take interest in this issue, not only because of the potential disruption to the current wealth distribution model but also because of bitcoins overvaluation in 2017. At the height of the mania, the number of people registered in crypto exchanges reached 1.5 million, representing more than double the number of individuals registered as traders on the stock exchange.
These huge numbers led to the holding, in September 2017, of a public hearing in the Brazilian Chamber of Deputies Special Committee on Virtual Currencies, in order to discuss crimes in the virtual currency market. That gathering was attended by representatives of the Federal Public Ministry and other entities concerned.
On that occasion, the discussions involved the points of the law project n. 2.303/2015, which intends to frame the digital currencies in the Payment Arrangements law under the supervision of the Central Bank of Brazil, similar to the regulation of credit cards.
Apart from that, and although there are some drafts proposed by congressmen who dream of regulating it, there are currently no specific prohibition or regulation on the use of cryptocurrencies in the country. The only official position so far is an instructio ...Read full story on AMBCrypto