Brazilian President Luiz Inácio Lula da Silva, known to many simply as Lula, has signed legislation clarifying the role of the country's central bank and securities regulator with regard to cryptocurrencies.
In a notification dated June 14, President Lula signed Government Decree No. 11.563, establishing rules under Brazil's legal framework for cryptocurrencies from December 2022. The legislation empowers the Central Bank of Brazil to regulate and supervise virtual asset service providers and ensures that many token projects that qualify as securities will continue to fall under the purview of the Comissão de Valores Mobiliários, or CVM the Brazilian equivalent of the US Securities and Exchange Commission.
The CVM aims to create a regulatory framework that better accommodates cryptocurrency trading volumes in the country and emerging markets. According to the notice, the decree, which will come into effect on June 20, will not affect certain laws on consumer protection and finance ial crime. The decree comes as Brazil's central bank is expected to begin a pilot project for a central bank digital currency (CBDC) in partnership with major payment companies including Visa and Mastercard. The bank will test the privacy and programmability features of its platform for a possible rollout of digital reality.
Brazil, one of the largest markets in South America, is home to cryptocurrency exchange Mercado Bitcoin and has licenses from foreign payment providers including Crypto.com and Bitso. In March, US cryptocurrency exchange Coinbase announced that it had partnered with a local comp any to offer cryptocurrency purchases to Brazilian residents.
