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Brazilian Senate approves regulation of cryptocurrency market

RIO DE JANEIRO, BRAZIL – The Senate today (26) approved a project that brings regulation to the national cryptocurrency market. The proposal provides guidelines for the “provision of services related to virtual assets” and regulates the activities of companies that offer these services. The text goes back to the Chamber of Deputies.

Cryptocurrencies are fully digital money traded over the Internet. The accelerated growth of this market worldwide has led to concerns about its use for money laundering in the face of inadequate regulation. For the new market to function, virtual asset providers must obtain prior authorization “from an organ or body of the federal public administration.”

Brazilian Senate approves regulation of cryptocurrency market. (Photo internet reproduction)
Brazilian Senate approves regulation of cryptocurrency market. (Photo internet reproduction)

According to the approved text, a virtual asset is “the digital representation of a value that can be traded or transferred electronically and used for payment or investment purposes,” excluding traditional national currencies and assets already regulated by law. The executive branch must appoint a body of the federal public administration to determine which financial assets should be regulated by the future law.

The provision of services related to virtual assets will have to follow some guidelines, such as the obligation to control and keep separate the client’s resources. It will also have to adopt good management practices, transparency in operations and a risk-based approach, information security and the protection of personal data, the protection and defense of consumers and users, the protection of the public’s savings, and the soundness and efficiency of operations.

It will also require the prevention of money laundering, concealment of assets, rights, and values, combating the activities of criminal organizations, financing terrorism, and financing the proliferation of weapons of mass destruction in accordance with international standards.

The regulation does not apply to NFTs (non-fungible tokens). According to the rapporteur of the approved replacement, Senator Irajá (PSD-TO), the NFT, a type of digital certificate of service, can be regulated by the Executive Branch in law after the project’s approval.

With information from Agencia Brasil

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