Brazil Approves Law that Regulates Cryptocurrencies and Favors Bitcoin Mining with Renewable Energy

After more than a decade on everyone’s lips, cryptocurrencies have become one of the most desired and traded items in the world.

More and more countries are paying attention to what it can mean to have Bitcoin in the spotlight. Which is why there are also more and more countries that are slowly introducing laws to regulate the use of Bitcoin, Ethereum, and all other currencies.

If on top of that we take into account the use of sophisticated software by traders like a Kucoin crypto bot, you can see that the trend of investing in cryptocurrencies will not go down. 

Brazil is one of these countries that has not ignored the continuous rise of cryptocurrencies, and that is why it has passed a law that can change everything. 

Below, we would like to explain in more detail what it is about and how Brazil is going to focus on mining that is more sustainable and with long-term projection.

Brazil’s Approval | Reaching for Renewable Energy

Brazil is discussing a regulatory proposal that will mark a before and after for the cryptocurrency industry in the Latin American country.

The Brazilian Chamber of Deputies approved, in its first round of consideration, Bill No. 3825 presented by Senator Irajá Abreu, to regulate the cryptocurrency industry and favor Bitcoin mining powered by renewable energy sources. 

The bill in question was attached to Congressman Aureo Ribeiro’s regulatory proposal, which was approved by the Senate Economic Affairs Committee last February and recognizes and regulates the cryptocurrency market in Brazil. 

Abreu and Ribeiro are now working together to create a joint bill to build a legal framework to regulate commercial and financial activities carried out with cryptocurrencies in the country. 

Abreu noted that he will include the proposals and amendments presented by the senators during the first round of the plenary to optimize their regulatory proposal.

The new bill is expected to be voted in plenary next Tuesday, April 19 and to be approved, definitively in the country, during this first semester. 

Brazil Backs Green Bitcoin Mining 

The bill presented by Abreu is aimed at accelerating Brazil’s leadership as one of the most pro-crypto nations in the entire world. On top of that, it could make the nation one of the largest cryptocurrency regulators, as it aims to make it the national government that directly oversees this growing industry. 

Brazil could delegate the supervision and regulation of the crypto industry to the Central Bank, the Securities and Exchange Commission or, alternatively, create a new entity for that purpose.

In this bill, rules are included to guarantee the creation of a solid cryptocurrency market, in addition to ensuring the protection of investors and consumers and favoring the sustainable mining of Bitcoins. 

If approved, the bill will establish a zero tax rate for Bitcoin miners who sustain their activity in the network using clean and renewable energy sources. Also, it will eliminate taxes for the importation of ASIC miners.

In addition to all this, the Brazilian Senate has pointed out that the crypto regulation presented by Abreu includes a registry of politicians and public servants in the country, which will help guarantee and maintain the transparency of the crypto market to contribute in the fight against money laundering and financial crimes. 

Brazil, an Emerging Market for Cryptocurrencies

Brazil is unifying regulatory proposals on Bitcoin and cryptocurrencies with the aim of creating the necessary rules to stimulate the responsible development of a national cryptoasset market. 

The country was the first in Latin America to approve the creation of exchange-traded funds (ETFs) for Bitcoin and Ethereum, the main cryptocurrencies in the market. Brazilian regulators also approved the first ETF focused on decentralized finance (DeFi) in the region. 

Recently, the city of Rio de Janeiro, one of the largest and most populated cities in Brazil, reported that, starting in 2023, it will accept cryptocurrencies such as Bitcoin in the payment of taxes. 

The mayor of Rio, Eduardo Paes, said that this is a way to recognize and support the potential of the crypto market and digital assets. 

The Rio de Janeiro city council also put forward the idea of creating an NFT collection and encouraging local artists to enter the crypto art movement, with the aim of incentivizing culture and creating a new source of municipal revenue. 

Also, in addition to regulating and boosting investment in cryptocurrencies, Brazil will also create its own digital currency (CBDC). The Central Bank of Brazil confirmed that this 2022 it will start pilot tests for its Brazilian real digital currency.

What Other American Countries Have to Say

Undoubtedly, Brazil’s approach to cryptocurrencies is impressive. It is a prospect that still seems groundbreaking to many – but not all – other governments.

A clear case on the incorporation and acceptance of cryptocurrencies is El Salvador. After being voted president in 2019, Nayib Bukele made Bitcoin the official currency, alongside the US dollar.

This sudden move by Bukele is talked about on a daily basis to this day. The truth is that for the moment it has not brought the expected results from the president and his citizens. 

Even so, other countries have realized the possibility of converting Bitcoin into the official currency, thus saving economies that are about to collapse completely.

Conclusion

Turning your back on cryptocurrencies is no longer as easy to do as it was a (few) years ago. Anyone who is even slightly interested in the world of investments or trading, will not even be able to ignore the topic completely.

The same has also happened with Brazil, forcing now in 2022, the country to act on the repercussions and the future of Bitcoin in its economy.

Luckily, Brazil is taking its decisions calmly, wanting to offer the best environment for cryptocurrencies and their use. Now we will just have to see if the new law will really take effect – or if it is the beginning of a bad end.