Brazil’s president signs law aimed at having central bank regulate crypto firms

The Brazilian President, Luiz Inácio Lula da Silva, commonly referred to as Lula, has signed a law that defines the responsibilities of the country’s central bank and securities regulator in relation to cryptocurrencies.

On June 14, President Lula signed Government Decree No. 11.563, creating regulations in line with the December 2022 law on a legal foundation for cryptocurrencies in Brazil. This legislation gives the Central Bank of Brazil the authority to oversee and control virtual asset service providers, and ensures that tokens that meet the criteria of securities will still be monitored by the Comissão de Valores Mobiliários, or CVM – Brazil’s version of the United States’ Securities and Exchange Commission.

Cointelegraph Brazil has reported that the CVM is aiming to develop a regulatory structure that is better adapted to the amount of crypto trades in Brazil and other developing markets. The announcement states that the decree will take effect on June 20th without affecting certain consumer protection and financial crime laws.

The decree was issued as Brazil’s central bank is set to launch a trial run of a Central Bank Digital Currency (CBDC) in partnership with major payment companies such as Visa and Mastercard. The bank will assess the privacy and programmability of its system in preparation for the potential introduction of a digital real.

A report states that Brazilian crypto exchange Mercado Bitcoin has been licensed as a payment provider.

Boasting one of the largest markets in South America, Brazil is the home of crypto exchange Mercado Bitcoin and has granted licenses to foreign payment providers such as and Bitso. In March, Coinbase, a U.S. crypto exchange, declared that it had formed a partnership with local companies to give Brazilian citizens the opportunity to purchase cryptocurrencies.

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