Key Takeaways:
- Funds can now be invested in cryptocurrencies owing to the Brazilian Securities Commission CVM’s new approach.
- According to President Joao Pedro Nascimento, technology must be utilized properly since the future is green and digital.
Funds can now be invested in cryptocurrency-based projects thanks to the Brazilian Securities Commission CVM. The agency has published a new set of regulations that give financial investment funds the same safeguards as those provided to conventional investment assets like stocks and bonds when investing in cryptocurrency tokens, creating new marketplaces for these businesses.
After proper permission from the State Representative Council, Bolsonaro’s office said that the president had signed bill 14,478 into law in the official federal government journal that was published in Brazil on December 22. On November 29, the legislature took the final step for recognising cryptocurrency payments by sending a letter to the presidential table.
The future, in the opinion of President Joao Pedro Nascimento, is green and digital. The capital market is using technologies that are extremely advanced, such as artificial intelligence and algorithms.
The agreed structure expressly states that cryptocurrency transactions must be carried out on Brazilian Central Bank or CVM-licensed exchanges. If these are made overseas, a local manager will need to handle the investments.
Regardless, these organisations shall have the legal authority to supervise and examine the operations effectively , as well as with respect to the struggle against unfair market practises, as well as money laundering and the funding of terrorism and the spread of weapons of mass destruction.
A multisectoral interaction forum is the Financial Innovation Laboratory (LAB). The Inter-American Development Bank (IDB), which was established in 2017 by the Brazilian Development Association (ABDE), also has the support of the Securities and Exchange Commission (CVM).
Additionally, it collaborates with the German Organization for International Cooperation (GIZ) GmbH. To advance sustainable finance in the nation, it brings together more than 300 institutions from various public and commercial sectors.
According to the new law, crypto assets may be included in a fund as long as they are traded in establishments that are approved by either the CVM or the Central Bank of Brazil, or – in the case of activities overseas – by a local supervisor.
The fact that this new framework was released so soon after the country’s cryptocurrency law was approved demonstrates that Brazilian institutions are anxious to regularise digital assets’ status in several areas. After initially refusing to allow funds to participate in cryptocurrencies in 2018, the Brazilian Securities Commission itself made a U-turn.
