Brazil’s economic affairs committee on Feb 22 unanimously gave the bill a green signal for regulating digital assets. The recent move if accepted by the full Senate and is signed by its President Jair Bolsonaro would make it the largest Latin American nation to have legalized crypto transactions.
The proposed bill specifies digital assets and categorizes their service providers, thus giving the government power to determine which body will be responsible for regulating business with cryptocurrencies. According to Sen. Iraja Abreu who backed the bill, expects this responsibility will fall on the central bank, which helped construct the legislation.
In addition to that, the bill requires virtual asset service providers to act against money laundering while combating criminal elements, terror financing, and the spread of weapons of mass destruction.
The latest developments come on the same day Russia’s Finance Ministry submitted a draft crypto regulation law that said digital currencies are only available as an investment tool and not as a means of payment.
Having said that Brazil is considered by several global exchanges who see the country’s potential as Latin America’s main market in 2022.
Brazil emerges as the hottest Latin American market for crypto exchanges
The obsession began in 2020 when crypto exchanges began to notice that Brazilian stablecoin traders were quadrupling in number. By 2021, locals traded $11.4 billion in stablecoins, while bitcoin trading reached $10.8 billion over the same period.
Moreover, Brazilians have incentives to buy crypto instead of U.S. dollars to hedge against inflation or devaluation. Despite the country being embroiled with economic imbalances, the region continues to attract major crypto players such as Binance, Coinbase, and Crypto.com.
Not only that, the global payments company Ripple considers Brazil to be the key driver of growth in Latin America. Even regional crypto exchanges already operating in Spanish-speaking markets are also eyeing Brazil.
In the latest development, Brazil-based crypto exchange Foxbit has secured $21 million in a Series A funding round led by OK Group. Founded in 2014 by João Canhada and Luís Augusto Schiavon, the firm at the moment boosts around 950,000 customers, according to its website.