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Central Bank of Brazil to Regulate Local Crypto Industry

Press Releases Crypto News BeInCrypto Central Bank of Brazil to Regulate Local Crypto Industry

Brazil, one of the world’s top users of crypto, made progress toward regulatory clarity on Wednesday. A law signed this week by the nation’s president gives the Central Bank of Brazil a decisive voice in crypto regulation, but also raises several questions. Particularly regarding which cryptocurrencies can be classed as securities.

Brazil’s President, Luiz Inácio Lula da Silva, has signed Decree no. 11.563, granting the Central Bank of Brazil the authority to regulate and supervise virtual asset service providers. It ensures that token projects qualifying as securities will remain under the supervision of the Brazilian Securities and Exchange Commission (CVM). The new law aims to establish clear roles for the central bank and securities regulator in relation to cryptocurrencies. The decree is dated June 13, 2023, and will come into effect on June 20.

Further Clarity for Crypto Regulation in Brazil

However, there is one big sticking point. The new law does not clearly define which digital assets are securities and which are not.

Brazil bases its concept of a security on a collective investment agreement definition inspired by the Howey Test. A standard first established by US courts. If this interpretation were to hold, it is likely Bitcoin (BTC) will escape the definition.

Learn more about how Brazil and other countries define a security: What Is the Howey Test and How Does It Impact Crypto?

The move contrasts with recent action by the United States’ own Securities and Exchange Commission (SEC). Gary Gensler, the agency’s chair, has attempted to classify almost all cryptocurrencies as securities.

In a recent legal actio

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Author: Josh Adams

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