Brazil's Central Bank Reports Surge in Crypto Adoption, Plans Stricter Regulations
Summary:
The Central Bank of Brazil's governor, Roberto Campos Neto, noted a significant rise in crypto adoption in the country at the Finance and Taxation Commission. Considering a 44.2% increase in cryptocurrency imports from January to August 2023 compared to last year, he intends to implement stricter digital asset regulations. The bank plans to extend its supervision to crypto platforms due to potential related issues like tax evasion and illegal activities. Meanwhile, the Central Bank is constructing its digital currency, Drex.
Speaking before the Finance and Taxation Commission of the national legislature, the Central Bank chief in Brazil highlighted an expansive growth in cryptocurrency usage across the country. He stated that the bank would react to this trend by implementing stricter regulations on digital assets. Roberto Campos Neto, the head of the Banco Central do Brasil, emphasized on September 27 an increase in Brazilians' crypto "imports." The bank's records indicate a 44.2% hike in crypto imports between January and August 2023, compared to the same eight months in the previous year. The total funds accumulated to approximately $7.4 billion, or 35.9 billion Brazilian reals.
Neto separately pointed out the growing prominence of stablecoins, suggesting they were more commonly utilized for transactions rather than investments. He described the bank's plans to assert tighter control and expand its supervision to include cryptocurrency platforms in response to these tendencies. He mentioned that issues associated with cryptocurrency could encompass tax fraud and illegal actions, saying: "We recognize that a substantial portion is associated with tax-avoidance or tied to illicit activities."
In June 2023, the Central Bank of Brazil took the lead in managing cryptocurrency regulation. Still, token initiatives deemed securities remain under the jurisdiction of the Comissão de Valores Mobiliários, or CVM – the Brazilian counterpart of the United States Securities and Exchange Commission.
The Central Bank of Brazil concurrently is developing its own digital currency named Drex. In August, the bank publicized the brand and logo of its central bank digital currency or CBDC. Pedro Magalhães, a Brazilian blockchain developer, allegedly recognized elements in Drex's code in a prior dispute which could permit a central entity to freeze funds or lessen balances.
Published At
9/28/2023 8:25:30 AM
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