The Senate’s economic affairs committee unanimously approved a bill to regulate the use of bitcoin in financial transactions on a daily basis.
According to an official statement, the Brazilian Senate’s Economic Affairs Committee (CAE) approved a bill on Tuesday to recognize and regulate the country’s Bitcoin and cryptocurrency markets.
CAE’s unanimous approval of PL 3825/19 – a bill authored in 2019 by Senator Flavio Arns but co-written with the central bank, securities exchange commission (CVM), and federal tax authority (RFB) – represents an initial step for a bill that seeks to establish ground rules for the use of bitcoin in financial transactions and as an investment asset.
The bill also includes tax breaks for the bitcoin mining industry. Business entities that purchase hardware and software for the processing, mining, or storage of bitcoin and cryptocurrency would be exempt from import taxes as well as some transaction taxes that affect local sales. However, only businesses that use 100% renewable energy and are carbon neutral would be eligible for the tax breaks.
The bill aims to govern the establishment and operation of Bitcoin service providers in Brazil, defining such entities as those who provide cryptocurrency trading, transfer, custody, administration, or sale on behalf of a third party. Cryptocurrency service providers will be able to operate in the country only after receiving explicit permission from the federal government.
According to a media source, Senator Iraja Abreu told Bloomberg by phone Monday that he expects the central bank to be responsible for regulating businesses providing cryptocurrency-related services in Brazil, though the bill states that the government will determine which institution will take on this responsibility. In the statement, Iraja stated that the CVM should only be used when digital assets are used to raise capital in financial markets.
According to a recently submitted request for it to be processed concurrently with a second Bitcoin-related bill, the bill is expected to go to the Senate floor next. The proposal would then be put to a vote in the House, which is the final step before President Jair Bolsonaro considers signing it into law.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
