Central Bank will be the regulator of the Bitcoin and cryptocurrency market in Brazil, guarantees Deputy Expedito Netto

During a conversation held this Friday, 10th, with the press and with several representatives of the financial and crypto assets setcor, the Federal Deputy Expedito Netto (PSD-RO), rapporteur of bill No. 4401/2021, declared that it will be up to the Central Bank to establish rules for cryptocurrencies in Brazil.

Netto, during the meeting, stated that he withdrew the Bill that was to be voted on in the Chamber Plenary, in order to help with details and remove points that could make it difficult to pass the Legislative House.

Among the points highlighted by the Deputy are the obligation of exchanges to report suspicious transactions of their users to COAF; the segregation of assets (which is the exchange’s impossibility to sell clients’ assets and ‘work’ with the money); the information of Politically Exposed Persons (PEPs) and incentives for the mining sector.

Among the points highlighted by the Deputy, during the meeting, two of them were more controversial: COAF and segregation of Heritage.

Regarding COAF, the Deputy stated that he will have a meeting with the institution on Monday, 13th. However, he does not see any sense in including in the Law the obligation of COAF since the federal agency already works in ‘union’ with the Central Bank of Brazil, which, according to him, will be the market regulator.

“The Central Bank will be the market regulator and it already works together with COAF. I don’t need to say that they will work together, because they already work together. it will harm innovation and competition in the sector as it will not give ‘time’ for international companies operating in the country to adapt to all the rules necessary to report transactions directly to COAF. However, the text is open and I will talk to COAF next week coming,” he said.

Regarding the segregation of assets, the Deputy guaranteed that it is not a question of “freeing exchanges to sell customers’ cryptocurrencies”, but of allowing the Central Bank to define the rules and establish the necessary points according to the dynamism of the market and the different types of operation involving the crypto assets.

“As it currently stands in the PL, this rule of asset segregation harms the cryptocurrency market. It is not about releasing companies to sell client assets, but removing the obligation of asset segregation from the law so that the regulator defines the guidelines for the different types of investments that exist in the crypto-assets market. Banks already do this with clients’ money under the supervision of the Central Bank”, he said.

Divergent points generate debate

At the meeting, Expedito Netto assured that the new text is being built together with Deputy Áureo Ribeiro (SD-RJ), with the Federal Government via the Central Bank and with the congress of party leaders of the congress. Therefore, according to him, as soon as the text is ‘closed’ it should be approved without problems in the Chamber and go to President Jair Bolsonaro to sanction.

In this way, the points of the project that deal with incentive laws and tax burden reduction for energy issues should be removed because there is already a great debate in the Chamber, in other PLs in the energy sector.

However, some of the points of divergence cited by Netto still generated debates among the participants of the meeting. In conversation with Cointelegraph Mercado Bitcoin stressed that it is against the withdrawal of the Segregation of Assets rule.

“The Bitcoin Market is in favor of the asset segregation rule because it understands that it is a necessary protection for consumers’ resources, so that their assets are not confused with the resources of digital asset service providers. their investments without risk of misuse by companies, such as, for example, in the formation of financial pyramids”, he said.

Rodrigo Monteiro, Executive Director of ABCcrypto, who was present at the meeting, highlighted that the entity is in favor of the points related to COAF and PPEs and stated that the association’s fear is that the period between the approval of the Law and the companies’ adaptation period is too long and, in this gap, international exchanges take advantage of not complying with current rules already in force.

“We want an environment in which all companies comply with the same rules. Our fear is that this transition will take a long time to happen. We should have an adequate transition in time and adopting the same requirement for all”, he said.

In the same vein, Reinaldo Rabelo, CEO Mercado Bitcoin, also said that the way the rules are currently established, international exchanges are privileged because they do not comply with the rules and do not pay taxes in the country, without guaranteeing, at the other end, the security of the client. .

“We don’t want to prevent foreign companies from coming to Brazil, we just want the same rules for everyone, but the way it is today, it suffocates the local economy,” he said.

Exchanges are like brokers

Leandro Vilain, director of Business Policy and Operations at FEBRABAN, defended at the meeting that exchanges are like investment brokers and, as such, must comply with the same rules as the latter, especially with regard to asset segregation.

“Conceptually, the regulator’s intention is to protect the consumer. It doesn’t seem fair to me to make the comparison between cryptocurrency exchanges and banks, because I would say that the most correct thing is to compare with the stock exchanges, this is guaranteed. It guarantees the consumer that he can access his resources at any time. Cryptoassets are financial assets, such as stock exchanges. So, my asset that I bought, which in this case are cryptocurrencies, it has to exist because the owner is not the exchange it is the user,” he said.

Also according to Vilain, banks cannot simply take the customer’s money and “work” with this money anyway. There are several control mechanisms and balances to guarantee the customer’s access to their resources, and he mentioned the credit guarantee fund and the compulsory deposit of banks as an example.

At the end of the meeting, Federal Deputy Expedito Netto assured that the text is still open and that suggestions are being considered, but that the ideal is to close a text soon and send it for approval, as there is a consensus established in the Chamber for the approval of the agenda. .

“If we keep discussing point by point and broaden the debate again, we won’t have anything approved and we’ll waste time,” he said.