The Senate’s economic affairs committee unanimously approved a bill that seeks to regulate the day-to-day usage of bitcoin in financial transactions.
The Brazilian Senate’s Economic Affairs Committee (CAE) approved a bill on Tuesday to acknowledge and regulate the Bitcoin and cryptocurrency markets in the country, according to an official statement.
CAE’s unanimous approval of PL 3825/19 – a bill authored in 2019 by Senator Flavio Arns but jointly crafted with the central bank, securities exchange commission (CVM), and federal tax authority (RFB) – represents an initial step for a bill that attempts to create ground rules for the day-to-day usage of bitcoin in financial transactions and as an investment asset.
The bill also provisions tax incentives for the bitcoin mining industry. Business entities that acquire hardware and software for the processing, mining, or preservation of bitcoin and cryptocurrency would be exempt from import taxes, as well as from some transaction taxes that affect local sales. However, only businesses that exclusively use renewable energy sources and are carbon neutral would be eligible for the tax incentives.
The bill seeks to regulate the establishment and operation of Bitcoin service providers in Brazil, defining such entities as those who provide cryptocurrency trading, transfer, custody, administration, or sale on behalf of a third party. Cryptocurrency service providers will only be able to operate in the country after explicit authorization by the federal government.