The Brazilian government will issue a new decree clarifying the rules for cryptocurrencies established by the Cryptocurrency Law approved on December 21, 2022. The document, prepared by the Ministry of Finance, will clarify the areas of supervision and the responsibilities of the Central Bank of Brazil and the National Securities Regulatory Agency (CVM).
The move is in line with the government’s goal of providing a framework to foster the growth of the digital asset industry while ensuring investor protection.
The decree, which is expected to be reviewed by executive aides to President Luiz Inácio “Lula” da Silva before receiving sanctions, will provide guidance on areas of oversight for both regulators.
The Brazilian government passed a new cryptocurrency law in December 2022 to provide a regulatory framework for the country’s digital asset industry. However, the law has left some gaps that the new decree aims to fill.
According to local media reports, the Ministry of Finance is working on the decree, which will provide clear guidelines for virtual asset service providers (VASPs) and cryptocurrency exchanges.
The Central Bank of Brazil will be in charge of supervising and organizing the actions of cryptocurrency exchanges in the country, with a particular focus on ensuring compliance with the rules stipulated by law. VASPs will be subject to regulations similar to those currently applicable to banks.
On the other hand, the Brazilian securities regulator will regulate tokenized securities and analyze whether each tokenized asset constitutes a security. A new department, the Digital Assets Supervision Unit, will be established to oversee this task.
The issue of asset segregation, which recommends that exchanges keep their assets separate from those of their users, will also be included in the new decree. The proposal was initially included in a bill during discussions in Congress but was not made into final law due to disagreements among lawmakers.
The new decree is in line with a statement made by former legal reporter Expedito Netto on the revisions announced by the government of Luis Inacio “Lula” Da Silva in January.
Brazil’s cryptocurrency industry has grown significantly in recent years, and the government’s move to provide clear guidelines will undoubtedly promote further growth and stability in the industry. The decree is expected to provide more clarity and transparency to investors and companies operating in the Brazilian cryptocurrency space.
The new regulatory framework will also help fight fraud, money laundering and other illegal activities in the cryptocurrency space. The Brazilian government has made it clear that it is committed to creating a safe and secure environment for the digital asset industry to thrive.
