Brazil’s Senate took its first step toward regulating the country’s cryptocurrency market on Tuesday (Feb. 22), with the body’s economic affairs committee unanimously approving a bill creating rules for digital currency funds.
As reported by Bloomberg News, the bill, if passed, would make Brazil the largest Latin American nation to regulate cryptocurrencies.
The legislation still needs to be approved by the full Senate and lower house before Brazilian President Jair Bolsonaro can sign it into law.
The bill defines virtual assets and classifies their service providers, giving the federal government authority to determine which body will be responsible for regulating cryptocurrency business. Senator Iraja Abreu, who supports the bill, tells Bloomberg that he expects this responsibility to fall to the central bank, which helped craft the legislation.
Read more: In Brazil, Bitcoin Acceptance Comes With More Regulation
Under the bill, virtual asset service providers must prevent money laundering and asset concealment while combating criminal organizations, terrorist financing, and the proliferation of weapons of mass destruction.
Last year, the Brazilian Lower House passed a different bill with rules governing virtual currency trading in Brazil. Abreu said that the new regulation, which is more focused on investments than popular use, establishes a favorable environment for the more regular use of cryptocurrencies.
“With regulation, cryptocurrency will become even more popular,” Abreu said. “Once this regulation is approved, the trend is that it will be adopted more and more in the supermarket, in the trade, in a car dealership.”
Read more: Russian Finance Ministry Proposes Crypto Rules
The vote came on the same day that the Russian Ministry of Finance introduced a draft crypto regulation law stating that digital currencies are only available as an investment vehicle and cannot be used to make payments.
The law also requires platforms to inform potential clients about the risks associated with digital currencies and requires clients to take an online test to determine if they are aware of the risks before they can invest.
If the client passes the test, he can invest up to 600,000 rubles (about $7,500) a year. Otherwise, the most they can invest is 50,000 rubles, or about $625.
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