Regulation in Rio

Regulators might be singing a different tune around Carnival next year. Brazil’s Securities and Exchange Commission has set its sights on making significant changes in the country’s approach to cryptocurrency regulation.

• A bill currently up for consideration does not classify tokens as digital assets or securities, meaning the SEC would not have oversight regarding their regulation.
• The commission’s recent appointment of a new board, coupled with crypto’s increasing effects on the Brazilian financial system, is most likely responsible for the change in approach to regulatory responsibility.
• Officials began work on crypto regulation in 2015, but final approval for a bill only came this April. Now it awaits final approval from Brazil’s congress before being sent to the president to be signed into law.
• A representative of the SEC said, “The mentioned bill needs specific improvements”, going on to define virtual assets and authorization requirements as key areas needing attention.

Right now, officials remain divided, with some favoring an entirely new bill being drafted, while others believe that sending the bill forward as-is and allowing the president to sort it out via decree is the best approach.

A separate crypto bill was also submitted to Congress in June. If approved, that proposal will authorize the use of crypto as a payment method and provide protection of private keys from being taken by Brazilian courts.