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Brazilian Securities Watchdog Demands Modification in Cryptocurrency

12-Sep-2022 By: Divya Behl
Brazilian Securities

The CVM, the Brazilian Securities Commission

The Brazilian securities regulator, the CVM, 

has issued a fresh order seeking specific amendments to the cryptocurrency bill now being debated in Congress. 

The organization wants to close a gap in the present document. As per the organization, some tokens, such as tokenized physical goods and carbon credits, would not be deemed securities.

The CVM, Brazil's securities regulator, is pushing for amendments to the cryptocurrency bill that would explain how virtual assets will be treated in the country. The organization's new directive has adopted an aggressive stance, in contrast to the previous administration, which had made no recommendations regarding this bill.

The CVM is specifically requesting a revision in the text to allow certain digital assets, such as carbon credits, court rulings, and receivables, to be structured in a blockchain. However, according to the existing cryptocurrency bill's definition, they do not qualify as virtual assets.

However, these additional facts have not been addressed, and proponents of the bill believe there will be no opportunity to include this new correction. The bill's rapporteur, Deputy Expedito Netto, told local media that he was unaware of these aspects but that it was not feasible to amend the bill's present text.

Senator Carlos Portinho, believes that it is preferable to start again with a new cryptocurrency bill. He stated:

"Because the industry updated several notions, it opted to sit down and start again. We must exercise participatory democracy. Projects like these need to be debated to arrive at a more current wording and with more legal clarity. Few will be pleased if it is accepted in its current form."

These discrepancies between the proposers of the bill and representatives of the Brazilian CVM may render the existing cryptocurrency measure irrecoverable. However, there is a chance that the time and work that lawmakers have put into this measure will not be wasted.

This possibility anticipates the current version of the law being approved by Congress with certain portions of it being vetoed by the administration.

The final discussion of the cryptocurrency bill was scheduled for August, but Congress is busy with the upcoming general elections in October. This is the last opportunity to discuss this proposal before the elections in September.

Read also: SEC should use specialised offices for increasing crypto issuer filings

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