Look Inside the Bill to Find Out Why Brazil Isn’t Making Bitcoin Legal Tender

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Brazil is not joining the ranks of El Salvador; here is an explanation of the government’s cryptocurrency legislation.

  • Brazil’s “virtual asset” law aims to identify virtual assets and the companies that offer cryptocurrency-related services while also improving investor confidence via increased regulation.
  • The Central Bank of Brazil concentrates its efforts on creating the CBDC, often known as the digital Real.

According to cointelegraph news the President of the Brazilian Banking Federation, Murilo Portugal, has argued that  cryptocurrencies are not really currencies at all.

Brazil’s banking chief argues that crypto is a failure as a currency — but in neighbouring Venezuela it has already ‘changed the destiny of an entire country’.

Contrary to the rumours circulating online, what Brazil’s ‘Bitcoin bill’ is proposing is the regulation of cryptocurrencies – not the establishment of bitcoin as legal tender, something that is not mentioned anywhere in the proposed legislation.

In the last couple of weeks, many in the Bitcoin community were encouraged by the adoption of Bitcoin legislation by the Special Committee of the Brazilian Chamber of Deputies, believing that the nation would follow El Salvador’s lead and declare bitcoin legal currency as well. Several news sources, notably Yahoo Finance and Investing.com, misled a larger readership into believing that bitcoin will be accepted as legal tender in Brazil shortly. Before we go further in this guide, please register yourself on the BitcoinX App and be ready to invest in the Crypto markets.

brazil-bitcoin-legal-tender-issues
brazil-bitcoin-legal-tender-issues

It isn’t the case at all. Not only does the law make no mention of this method, but the governor of the Brazilian Central Bank (BCB), Roberto Campos Neto, has said on many occasions that making bitcoin legal currency in the nation is not on his agenda. It passed by the House’s Special Committee on September 29 and will now consider by the whole House in the coming weeks. The measure then moves to the Senate and finally to the Presidency’s desk, sign it.

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It should note that the law does not aim to make bitcoin legal currency in Brazil, contrary to popular belief. As an alternative, it seeks to improve investor protection by imposing tighter regulations on businesses that get engaged in “virtual assets,” as defined by the law, either via trading or custodial solutions. The law defines “virtual assets” as property, which includes any digital representation of value that may be negotiated or transferred electronically and that can be used as an investment or as a method of payment. This definition may be to blame for the misunderstanding and disinformation that has resulted, but just utilizing anything as a payment method does not imply that it is legal money. When it comes to airline miles, for example, Brazilians may use them to purchase plane tickets, daily consumer goods, and hotel stays, but they are not considered legal currency in Brazil.

Those virtual assets do not include domestic and international currencies, electronic money, loyalty programs such as fuel economy or similar systems, digital depictions of legal investment properties and bank deposits, and loyalty programs. Digital copies of legal property, including natural land and bank deposits, weren’t included in the definition of virtual assets. The exchange of data assets against or for fiat, the interaction of cloud services between themselves, a move of data assets, the ability to participate in finance, and the provision about the giving by a lender or the sale of data assets are all examples of commodity derivatives amenities.

Companies interested in operating in Brazil’s “virtual asset” sector will only be permitted to do so if they register and get a permit, which may need obtaining permission from organizations inside the Brazilian federal public administration.

BCB issued ten guidelines for developing the digital Real in May, which may find here. Campos Neto hopes to get the CBDC up and running in Brazil within the next couple of years. The fifth webinar, which will take place on October 19, will cover the methods for the issue, distribution, custody, and destruction of the digital Real. However, the governor has shown a greater interest in developing Brazil’s CBDC than in Bitcoin as a legal currency. The BCB stated that fast payments, an open system, and a convertible currency would be required for a digital Real to be successful.

Brazil’s financial system already has the capability of making immediate payments and transfer of funds. Customers’ information is shared at the institution’s discretion, allowing for more competition and better rates. Both organizations strive for customer data integration while ensuring that the client maintains ownership over their data.

In Brazil, Bitcoin Is Still a Long Way from Becoming a Legal Tender

The BCB, as well as the administration, have no intention of taking such a stance. Increased regulatory examination of businesses operating in the “virtual asset” sector is taking place in Brazil, with the goal of “improving investor protection” being the driving force. Instead, the BCB is concentrating on topics that it can influence.

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