Experts point out the achievements and gaps of the bill that regulates cryptocurrencies in Brazil
With the vote possibly postponed to the second semester in the Chamber of Deputies, the Bill (PL) 4401/2021, authored by federal deputy Áureo Lidio (Solidariedade/RJ), which provides for the establishment of a regulatory framework for the cryptocurrencies in Brazil, seems to be far from a consensus between the different actors, public and private, involved with the proposal. So much so that the original text has already undergone several changes, in the Chamber and Senate, and will possibly have other modifications before being voted on, according to statements and modifications presented by the rapporteur of the proposal in the Chamber, federal deputy Expedito Netto (PSD-RO).
Last Sunday, 23, in the Trends/Debates column of the Folha de São Paulo newspaper, the director of government relations at the Brazilian cryptocurrency exchange Mercado Bitcoin, Julien Dutra, and the blockchain specialist and CEO of Smartpay, Rocelo Lopes, responding to the same question, if the project is positive, they presented antagonistic answers about the text that establishes the rules for the “virtual assets” in the country.
project is positive
Julien Dutra said yes, that the text that proposes the regulation of cryptocurrencies in the country is positive. According to the executive, the regulation puts Brazil at the forefront of the world alongside countries such as Germany and the United States, where President Joe Biden recently signed an executive order encouraging the country’s regulatory bodies to analyze the crypto issue.
Dutra also claimed that the PL involved a broad debate between legislators and executive authorities related to the financial market, in particular the Central Bank (Bacen; BC) and the Securities and Exchange Commission (CVM), in addition to crypto market agents. . According to him, the proposal addresses the main concerns of cryptocurrency market enthusiasts, expands investor protection, does not regulate the technology itself and guarantees freedom, in addition to consolidating “best market practices.”
The executive added that companies affiliated to ABCripto (Brazilian Association of Cryptoeconomy) already followed international compliance standards and that they already reported customer operations to the Federal Revenue, following normative instruction 1.888/2019, in addition to Coaf (Council for Control of Activities Financial) and the Consumer Code.
He also highlighted that the proposal is based on free enterprise, competition, consumer protection and the prevention of money laundering and terrorist financing. According to him, illicit conduct “has been seen in numerous foreign companies that deliberately failed to adequately identify their customers.” Julien Dutra concluded by saying that the law should be “principled”, because it is strategic and follows the dynamics of the market, and that there is no doubt about the government’s interest in “developing this innovative market in favor of the digital economy.”
project is negative
Rocelo Lopes replied that the project is not positive, arguing that cryptocurrencies in Brazil have grown dramatically and that, therefore, they can no longer be ignored, so much so that more and more companies enter the sector, in addition to the interest of banks that, even in the past, recently promoted a veritable “witch hunts against cryptocurrencies.”
The expert still fired saying that the race for the approval of the Bill is a clear sign that “everyone wants to guarantee their fair share”, he added that the proposal leaves gaps and, therefore, does not protect startups, peer-to-peer (P2P) transactions and cryptocurrency exchanges, which, according to him, will not have guarantees established by law regarding the maintenance of their bank accounts, regardless of the “commercial interest” in them or not.
Arguing “banking protection for the broker and the user”, Lopes also defended asset segregation, one of the most controversial points of the proposal, which came to be included in the text approved in the Senate and ended up withdrawn by Expedito Netto. In this case, the separation of the cryptocurrencies that belong to the cryptocurrency exchange from the users of the platforms.
He also said that the project is not clear in relation to cryptocurrency mining, which according to the executive does not have tax exemption guarantees due to high energy consumption, which could inhibit the expansion of activity in the country. Finally, he criticized the excess of personal information requested from customers by exchanges, in this case KYC, “know your customer”, in Portuguese.
According to him, companies are handling a very large amount of data carelessly, which could be solved by conditioning the use of the platform to the maintenance of current accounts, by users, in the same banking institution where the exchange has an account.
With an eye on the approval of PL 4401/2021, at least four international exchanges would be about to officially land in Brazil.