The surge of cryptocurrencies has touched Brazil, South America’s largest nation. In terms of the volume of crypto transactions, the country ranks fourth in the world. 

This rise of digital assets is very promising for the local economy. In addition, the recent trend of digital currencies price has sparked new hopes in many investors. This dominance of digital currencies nowadays has become the reason of fear for some regulators.

They have started to think that cryptocurrencies may soon occupy the place of fiat currencies. Being the home of the largest crypto market of South America, Brazil has focused on digital currencies and asked all the legalized crypto firms to show more transparency and credibility for crypto transactions. Despite the dominance in the international crypto market, digital assets are yet to be regulated in Brazil.

According to financial experts, regulating these currencies would reflect on the gain to the traders. Juliana Assad, a computer security specialist and co-founder of Coinwise told The Rio Times that regulation of something positively impacts its adoption in society.

The Brazilian government has already realized the potential of this market and started a discussion about crafting regulations for digital currencies.

Crypto transactions are now reportable events

Some new rules and regulations on crypto transactions have already been adopted. Crypto traders will have to provide more data on transactions from now on. Companies are also required to submit reports on their holdings in the digital assets. Not only this, traders will have to provide a statement of crypto-to-fiat trading. The government is thinking about imposing a tax on this kind of transaction as well.

Reports from local media indicate that the Brazilian Department of Federal Revenue (RFB) issued new rules for cryptocurrency transactions and now individual traders and companies have to report the financial information pertaining to digital currencies including buying, selling, reserves, deposits, barters, donations, and withdrawals to the RFB.

The regulating body has set a threshold value of R$30,000 which is equivalent to approximately $7,000, for reporting to RFB. This means any transaction amounting to the above value or more must be reported. Traders making a single transaction of less than R$30,000 will not have to send the information of the transaction. However, companies have to send a monthly report of their crypto transactions to the department.

Government is committed to creating crypto regulation as soon as possible

The Central Bank of Brazil has also given a green signal to cryptocurrency holders by accepting these currencies as monetary assets. This step will make crypto trading easier among Brazilians. However, trade history needs to be reported to the country’s trade statistics. Brazilians may see a complete set of cryptocurrency regulations soon.

The President of the Chamber of Deputies of Brazil has ordered to form a commission to discuss crypto regulation for the country. The Chamber is a federal legislative body and the lower house of the National Congress of Brazil. The representatives of the Chamber are elected persons and they are responsible for approving proposals for economic and social sectors including health, transport, housing, etc.

The special commission that the President requested is supposed to provide an opinion on bill 2303/2015, which aims to regulate digital currencies available in Brazil. The commission will include 34 members in accordance with the House Rules of Procedure. Aureo Ribeiro, the Federal Deputy, has already presented two projects in the meeting about crypto regulation.

All these moves indicate how the Brazilian government is focusing on cryptocurrencies to make them formal and recognized financial asset that would contribute to the GDP. The involvement of the government in crypto evens like adding taxes to fiat-to-crypto transactions will make traders more confident and inspire them to invest in digital assets.

Although decision regarding tax rates is yet to be made, the traders are ready to contribute to the country’s federal reserves and help the nation’s economy with better liquidity.