In the wake of rapid advances in technology, the need for global regulation of digital assets has become increasingly important. In Brazil, authorities have stepped up to answer this challenge with the passing of Decree No. 11.563. Signed on June 13, 2023, by Brazilian President Luiz Inácio Lula da Silva, this new law designates both the Central Bank and the Securities Commission of Brazil (CVM) responsible for overseeing the crypto market.

Central Bank of Brazil is Authorized to Regulate Virtual Asset Service Providers

The Central Bank of Brazil has been authorized to regulate and supervise virtual asset service providers. The Central Bank will determine the rules and licensing requirements for exchanges, including penalties for fraud with virtual assets. Meanwhile, the role of the CVM is to exercise control over assets that are considered “securities”. The Decree lacks clarity in defining which digital assets qualify as securities and which do not.

In the United States, the Securities and Exchange Commission (SEC), headed by Gary Gensler, has behaved differently. In a recent legal action against Binance, the SEC classified many of the market’s most popular tokens as securities. Bitcoin, being the most popular digital asset, is likely to be exempt from SEC control and regulation.

High Adoption of Stablecoins and Crypto Usage in Brazil

Brazil has already become a regional crypto hub. Many major crypto companies and protocols such as Coinbase, Bitget and Metamask have opened up operations there. Brazil ranks seventh globally in crypto usage and has a high adoption rate of stablecoins, per Chainalysis. Moreover, Brazil’s central bank has chosen 14 institutions for the pilot program of its digital currency (CBDC). This includes prominent local banks, such as Bradesco, Nubank and Itaú Unibanco, and major payment firms like Visa and Mastercard.

Ultimately, it seems that Brazilian regulators are making good progress in understanding and regulating the cryptocurrency market. In a recent interview with BeInCrypto, Bruno Ramos de Sousa, the Head for US and Europe at Hashdex, expressed his approval and mentioned their active involvement in studying the crypto sector. Lastly, as they perfect their crypto regulations, Brazil appears poised to become an increasingly attractive hub for digital assets.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

The post Crypto Regulations Take Flight in Brazil: Central Bank & Securities Commission to Take Charge appeared first on Boxmining.

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Filed under: Bitcoin - @ June 16, 2023 4:16 am