Several proposals supporting a tax exemption for miners and elevating bitcoin to the status of a national currency were debated in Brazil’s congress.
A new proposal in Brazil’s Congress proposes for a tax exemption on crypto mining rig imports as well as any mining that uses green energy sources.
According to a Saturday story from Brazilian news site Seudinheiro, a series of fresh ideas from Brazilian lawmakers could help to minimize the negative press that cryptocurrency has received in South America’s largest country.
Congress also considered a proposal to classify cryptocurrencies as a currency rather than a commodity. Crypto exchanges will be permitted to provide financial services and issue loans to Brazilian residents if this plan passes.
Senator Irajá Silvestre Filho introduced all three bills in Congress. It’s unknown how much support the plans have in the legislature right now, but the Brazilian crypto community is very supportive.
According to Ray Nasser, CEO of Arthur Mining, if the tax exemption for crypto miners is passed, Brazil may become a global “Mecca of mining.”
The Central Bank of Brazil would be permitted to issue a digital real central bank digital currency if cryptocurrencies became legal tender (CBDC). Brazil would join nine other countries or jurisdictions that presently provide CBDCs to their citizens.
According to the International Trade Administration, Brazil presently produces just under half of its electricity from renewable sources. The cost per kilowatt-hour is around $0.12, which places it in the middle of the pack globally.
Taynaah Reis, CEO of Moeda, a blockchain finance business based in Brazil, stated :
“Crypto is rising rapidly in Brazil and the regulatory bodies have been very proactive and protective on incentivising mining and drafting policies on best practices as major businesses announced their plans on including crypto.”
Reis further stated that miners will be required to register their equipment with the Brazilian government in order for the Brazilian government to monitor the ecosystem.
Existing power supply issues exist in Brazil, where power rationing is becoming a reality. Power rationing is the practice of providing fewer amounts of power to specific areas of a country in order to protect the overall power grid.
According to Rudá Pellini, president of Arthur Mining, while Brazil is dealing with power rationing, the fresh addition of Bitcoin miners does not pose a threat to the power supply:
“One of the main problems in the energy issue in Brazil is the transmission. We have a large energy generation surplus in the country, and it is possible to promote greater investments in clean energy generation.”
Kazakhstan, which has become the world’s second-largest Bitcoin mining nation, has been plagued by power outages.