KEY POINTS

  • Brazil has been working to pass a cryptocurrency bill 
  • Law, if passed, will allow the president to appoint regulator
  • The bill does not propose Bitcoin as legal tender as in El Salvador

Brazil will soon have a more comprehensive regulatory framework to oversee the cryptocurrency market as legislators eye to pass the bill in the first half of 2022.

The bill, in the Chamber of Deputies since 2015, has been approved in the first round of consideration. House Bill 4401/21 has been converged with Senate Bill 3825/19.

The move expedited the process and moved the bill a step closer to legislation. The Senate president is anticipated to put the bill up for a vote next week and if approved, the draft bill will return to the Chamber of Deputies, which has taken a favorable stand on it.

Heavy rains have battered a broad swathe of Brazil's Rio de Janeiro state, with yet more rain forecast for the region
Heavy rains have battered a broad swathe of Brazil's Rio de Janeiro state, with yet more rain forecast for the region AFP / Ben STANSALL

The approved bill will then land on the President's desk for consent. Should the Senate approve the bill this month and smoothly move forward through the entire process, the target of getting it sanctioned by June is highly likely.

"I'm doing everything in contact with the Chamber's rapporteur, who did a very good job. The Central Bank's technical team has also been very helpful. The texts are similar and converged into one," Senator Irajá Abreu told Brazil's financial newspaper Valor Economico.

The senator also said that "By joining the projects together, we accelerated the approval of this cryptocurrency milestone. There is a market demand for a safer business environment and the need for criminal classification to avoid fraud, in addition to adjusting Brazil to international agreements."

Unlike in El Salvador, the approval of the law in Brazil's plenary will not make Bitcoin legal tender. The proposed legislation will enable the Brazilian president to appoint the entity that will establish rules for cryptocurrency in the country.

Apart from that, the bill suggests a penalty of four to eight years in prison and a fine for those who commit fraud in the cryptocurrency industry. The bill also proposes to give incentives to crypto miners.

Bitcoin was trading up 2.83% at $41,249.11 as of 4:50 a.m. ET on Thursday, according to data from CoinMarketCap.

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