The regulation of the law is being worked on with advice from the IMF, FATF and other international organizations.
The main regulator can penalize companies that do not comply with operating regulations.
Regulation will not come into effect for the Bitcoin (BTC) industry operating in Brazil until 2024, although the cryptocurrency law went into effect last June.
The Central Bank (BC) of the South American country is expected to be ready the regulation for the application of the Bitcoin Lawin the first half of next year.
This was reported by the central bank’s regulatory director, Otávio Damaso, before the parliamentary commission investigating the financial pyramids. This is against the background that MEPs wanted to know how the regulation of the crypto-active sector in Brazil is progressing.
Based on Dámaso’s comments, it follows The regulation for the bitcoin industry would come into effect in the country a year after the regulation went into effectand this will also come with changes from the law passed last November.
The law, approved by then-President Jair Bolsonaro, remains under scrutiny by the government of Luiz Inácio Lula da Silva, who took over the presidency of Brazil in January this year.
Then Lula da Silva established this by decree The central bank would be the main regulator of government. Therefore, it has the competence to regulate, authorize and monitor the virtual assets market and the companies that provide cryptocurrency services.
Now the BC is drafting the regulation that will determine how the Crypto Assets Act will be applied. And to do this, she is debating the issue with various sectors. All with the idea of submitting a proposal for public consultation before the end of the year, they say who informs through local media.
Bitcoin exchanges must use a segregation of crypto assets
Otávio Damaso reported that among the changes made by the team drafting the regulation is the need to oblige cryptocurrency exchanges and other companies in the industry to do so Separate your own assets and those of your customers.
The measure, which has been widely discussed by legislators in the past, is intended to prevent users’ cryptocurrencies from being mixed up in the operation of exchanges and other service providers.
The proposal was considered when the bill passed the Senate, but was later canceled because it divided the opinions of House lawmakers.
Bitcoin is also extremely monitored in Brazil
On the other hand, the central bank official added that the regulation is being worked on according to the recommendations of the International Monetary Fund (IMF), the Financial Stability Board and the International Financial Action Task Force (GAFI).
That is, from next year the exchange of Bitcoin and other cryptocurrencies operating in Brazil are reportable to tax all transactions of its customers and to identify users with KYC procedures or to know your customer.
Regarding financial pyramids and other scams, Damaso said that with the regulation of the cryptocurrency sector, the BC as the main regulator can use sanctions Institutions and directors who do not follow the operating rules.
For his part, the Public Prosecutor of the Republic, Thiago Bueno, who belongs to the Cybercrime Unit of the Federal Ministry of Public Security, said that the regulation will facilitate investigations.
However, the regulation also applies The aim is to tighten the rules and close existing gaps in the fight against money laundering, terrorist financing and sanctions evasion, although the measures are not effective in detaining criminals.
That makes it clear Brazilian cryptocurrency service providers will be part of the surveillance system without restrictions, covering every layer of the financial system. This will be the case, even if it ignores the fact that privacy is one of the basic human rights.