It appears cryptocurrency regulation is heading to Brazil.
South America has proven to be a popular haven for most forms of cryptocurrency. In Venezuela, for example, Live Bitcoin News has reported that assets like Dash have had quite a popular following throughout the country since the fall of its native fiat currency the bolivar. The country also attempted to introduce a national cryptocurrency known as the petro in early 2018, though the coin failed to attract any significant investors or change within the region’s financial markets.
The coin has consistently been marred by reports that it’s not genuinely attached to the country’s oil reserves. The coin has attracted too much controversy since it first came to the table. It is not listed on any major exchanges, and Donald Trump – president of the U.S. – has banned all petro trading within the nation he governs.
Nevertheless, crypto has still managed to make its way into many hands of the public. Now, in Brazil, a regulatory document known as “instruction 1888” has been published. The document is designed to prevent things like money laundering, tax evasion and other problems often associated with cryptocurrencies. The new rules it presents will go into effect on August 1, 2019. Every individual or company that engages in crypto activity will have to let Brazil’s treasury department know about their actions and dealings.
This is both scary and exciting. On one hand, it’s nerve-wracking to think that a government will be looking in on your financial activity granted it involves anything digital or crypto-related. No matter what you do or trade, there will always be that “eye in the sky” checking things out and making sure you don’t do anything foolish.
At the same time, however, it’s another sign that crypto is becoming not only more popular, but more mature, and its status as a mainstream asset class is growing faster than one could have anticipated. The fact that it’s now being regulated in Brazil suggests that it’s prone to widespread usage in the country, and officials want to keep it in their stead, much like traditional currency.
The document is described as:
… Legal, even non-financial, that provides services relating to operations performed with crypto-active, including inter-mediation, trading or custody, and which may accept any means of payment, including other crypto.
The report also defines the term “crypto-active” as:
…The digital representation of value denominated in its own unit of account, whose price can be expressed in local or foreign sovereign currency, transacted electronically with the use of encryption and technologies of distributed registries that can be used as a form of investment, an instrument for the transfer of securities or access to services, and which is not legal tender.