Brazil’s President Luiz Inácio Lula da Silva, known to many simply as Lula, has signed a law clarifying the role the country’s central bank and securities regulator will play in relation to cryptocurrencies.
In a June 14 statement, President Lula signed Government Decree No. 11,563 establishing rules under a December 2022 law on a legal framework for cryptocurrencies in Brazil. The legislation authorizes the Central Bank of Brazil to regulate and supervise virtual asset service providers, and ensures that many token projects that qualify as securities will remain the purview of the Securities and Exchange Commission, or CVM, the Brazilian equivalent of the United States Securities and Exchange Commission.
Cointelegraph Brazil reported that the CVM it aimed to create a regulatory framework better suited to the volume of cryptocurrency trading in the country, as well as in emerging markets. According to the announcement, the decree will enter into force on June 20 without affecting certain laws on consumer protection and financial crimes.
The decree comes at a time when Brazil’s central bank is expected to start a pilot project to launch its own digital currency, or CBDC, in collaboration with major payment companies including Visa and Mastercard. The bank will test the privacy and programmability features of its platform for the possible launch of a digital real.
With one of the largest markets in South America, Brazil is home to the popular cryptocurrency exchange Mercado Bitcoin and is home to authorized foreign payment providers such as Crypto.com and Bitso. In March, US crypto exchange Coinbase announced that it had partnered with local businesses to offer cryptocurrency purchases to Brazilian residents.
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