The rules and laws to govern the virtual digital assets sector have been outlined by Brazil, first nation to do so.
The President of Brazil, Jair Bolsonaro signed the bill into law. The parliament of Brazil earlier gave approval to the draft ruleset in November. All the crypto exchanges working in the the Latin American region will have 180 days to comply with the new guidelines.
Upcoming firms/crypto exchanges that want to operate in Brazil will have to obtain virtual service provider license.
According to a report, once the firms get their approvals, they will be able to establish physical offices in Brazilian cities.
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The CEO of the world’s largest exchange, Changpeng Zhao, called Brazil’s step a major milestone in the sector. He further twitted, Another great move that brings more credibility to this industry, improves user protection and targets mainstream adoption.
The laws aim to protect the investors from being defrauded as the sector is rife with scam artists and transactions are untraceable. The new laws instruct Brazil’s law enforcement units to create a new category under the crime of fraud that would deal with crypto frauds. It will be possible for notorious actors to be sent to prison for four to six years for violating the law.
In May, due to the rising number of investors, Nubank, Brazil’s largest digital bank by market value, began selling and buying the virtual currency. By 2023, Rio de Janeiro will allow its residents to pay property taxes in the form of cryptocurrencies.