A legislation project submitted in the Brazilian National Congress in June has recently gained attention because it establishes a time frame for the executive to begin regulating bitcoin transactions. If passed, the plan would mandate the payment of taxes on cryptocurrency-based transactions. The Chamber of Deputies is reviewing the initiative, which will need to be thoroughly examined by the Finance and Taxation Committee.
Bill 2140/21, a legislative project proposal filed to the Brazilian Chamber of Deputies in June, is presently in the spotlight because it creates a predetermined period for the executive arm of government to regulate cryptocurrency transactions. If adopted, it would set a time restriction of 180 days to develop all of the required institutions to effectively control bitcoin transactions. Alexandre Frota, a member of the Partido de la Social Democracia Brasileira, presented the concept (PSDB).
According to Frota, the lack of clear regulation for cryptocurrencies puts investors and the traditional financial system at danger, as crypto can aid in the movement of funds out of the country with minimal oversight. Frota stated: “ With private and public banks, it is necessary to have rigorous regulation and inspection so that the population will not be deceived with promises of high individual profits, which has already happened to a great extent.”
In recent years, Brazil has become notorious for its crime tied with crypto-related schemes. When it comes to putting a stop to these schemes, the government has been quick to act, conducting many operations in recent months to shut down and arrest people responsible for unlawful cryptocurrency-related activity.
Another critical component of the initiative states that operations conducted abroad must be evaluated in accordance with the same standards that apply to banks, including tax norms. However, due to the nature of bitcoin transactions, it is still unclear how this may be accomplished. A special committee of the Chamber of Deputies is now working on this subject.