Crypto
Brazil's Congress moves towards imposing higher cryptocurrency taxes
As per the legislation, the adjustments are only applicable to cryptocurrency exchanges without offices in Brazil. Through the added regulations, local exchanges could be a less costly option for some investors, especially for those with earnings above the top tax bracket. Moreover, the law could increase cryptocurrency exchange activity at a national level, while also drawing foreign investors to establish offices in Brazil.
Some of the global cryptocurrency exchanges that operate in Brazil include Binance, Coinbase, Bitso, and Crypto.com, along with local participants such as Mercado Bitcoin and Foxbit.
Cryptocurrency regulations in Brazil
Considering the growth of the cryptocurrency market, Brazil’s officials have imposed several new regulations, including a decree from June 2023 which clarifies the roles of the country’s central bank and securities regulator in cryptocurrencies. The rules were established based on a law imposed in December 2022, which determines a crime of fraud involving virtual currencies, with a penalty of four to six years in jail plus a fine. A virtual service provider licence, which must be requested by digital asset companies, as well as exchanges and trading intermediaries, has also been included, as digital assets that are considered securities must be supervised by the Brazilian Securities and Exchange Commission.
Back in February 2022, Brazil legislators laid the basis to regulate the cryptocurrency market, passing a bill that provides guidelines for virtual assets. Through the implementation of cryptocurrency regulations, Brazil would also be part of other countries in the region setting procedures for overseeing the developing asset class.
Latin America has seen overall growth in the penetration of cryptocurrencies in recent years, mostly due to high inflation levels, political instability, and the lack of availability of traditional banking services.