Brazil President Jair Bolsonaro has signed a new crypto regulation bill that will take effect over the next 180 days.
Companies will be given a six-month period to adapt to the new rules following the go-ahead by the president, the Chamber of Deputies and the Senate.
The bill was signed into law on Thursday and will seek to establish a robust regulatory framework that targets virtual assets and defines the appropriate penalties for breaking laws related to crypto.
In its current form, people can expect four and six years in jail plus a fine if they break cryptocurrency laws in the country.
In order to operate as a crypto business, a company will need to acquire a virtual service provider license. Once granted, a business may provide digital currency services.
Presently, the companies will be able to continue operating during the six-month grace period, but the Brazilian Securities and Exchange Commission (CVM) has urged businesses to act quickly and submit their applications to the regulator right away.
The CVM will specifically supervise digital assets that are deemed as securities, with other asset classes the remit of a yet unannounced regulator.
Meanwhile, companies have already been establishing their footprint in the Brazilian market. Crypto.com, a prominent exchange, has been able to secure its Payment Institution License from the Central Bank of Brazil and will operate as such moving forward.
Brazil is among the most ambitious Latin American countries to pursue growth in the cryptocurrency sector.
Despite the political turmoil in the country, President Bolsonaro has deemed the signage of this law of particular importance to the country’s future.
Meanwhile, other countries, including India, have remained wary of cryptocurrencies, with the Reserve Bank of India insisting that unless banned, cryptocurrencies will spell financial calamity.
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