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Brazil Eyes Bitcoin Revolution: Will It Follow El Salvador’s Lead? Reserve Bill Hits Congress

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Brazil’s Chamber of Deputies is set to debate a proposed bill to create a Strategic Bitcoin Reserve. Congressman Eros Biondini introduced the bill, which suggests allocating up to 5% of Brazil’s international reserves to Bitcoin. If approved, Brazil could diversify its national assets and enhance financial resilience.

Brazil Considers Bitcoin Reserve to Boost Economy

The bill emphasizes Bitcoin’s potential to hedge against geopolitical risks and currency exchange rate fluctuations. Congressman Biondini stated that a Bitcoin reserve would diversify assets while safeguarding the nation’s economy. This initiative could lead Brazil to acquire up to $3 billion worth of Bitcoin, contingent on legislative approval.

Brazil currently holds no Bitcoin in its reserves, unlike Venezuela, which owns 240 BTC. The proposed reserve aligns with the growing trend of crypto adoption among governments worldwide. According to analysts, such measures could strengthen Brazil’s position in the global financial system.

The lawmaker highlighted Bitcoin’s resilience and growing recognition as a strategic financial asset.

“This proposal aims to secure Brazil’s economic future,” Biondini asserted during a recent session.

Legislators are expected to deliberate the bill in the coming weeks.

Bitcoin Adoption Gains Momentum Across Latin America

Brazil’s proposal follows the precedent set by countries like El Salvador and Bhutan, which have adopted Bitcoin as a reserve asset. El Salvador became the first nation to implement a Bitcoin strategy, while Bhutan integrated Bitcoin into its sovereign wealth funds. These developments highlight Bitcoin’s growing role in international finance.

Similar initiatives are gaining momentum in the United States, with President-elect Donald Trump advocating for a Strategic Bitcoin Reserve. Reports indicate that a dedicated Crypto Advisory Council will oversee this plan. Pro-crypto Senator Cynthia Lummis has introduced a bill for the U.S. to purchase one million BTC within five years.

Brazil’s move signals increasing acceptance of Bitcoin among global policymakers. Crypto ETFs in Brazil have also seen record demand as Bitcoin nears $100,000. Such trends indicate that Bitcoin adoption is gaining traction in Latin America and beyond.

Creating a Strategic Bitcoin Reserve would mark Brazil’s entry into sovereign Bitcoin investments. This move could solidify its position as a regional leader in crypto adoption. Analysts suggest this step may pave the way for other Latin American nations to follow suit.

Although Brazil lacks existing Bitcoin holdings, its experience with crypto ETFs demonstrates familiarity with blockchain-based assets. Increased adoption may attract global investors and boost the nation’s financial stability. Moreover, a Bitcoin reserve could provide a buffer against external economic shocks.

Solana’s Big Bet on Brazil: 2nd ETF Approved

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Brazil’s regulator has approved the second Solana exchange-traded fund [ETF] as per the CVM database. The new SOL ETF is issued by Brazil-based asset manager Hashdex with over $962 million in assets under management — in collaboration with the local investment bank BTG Pactual. Brazilian Securities and Exchange Commission or CVM stated that the new fund is in a pre-operational phase.

Earlier the nation created history when CVM greenlighted the first-ever SOL spot ETF. The fund is provided by QR—a prominent player known for its Bitcoin and Ethereum ETFs—and will be managed by Vortx. At present, the ETF awaits final approval from B3, Brazil’s main stock exchange, It is expected to hit the market within 90 days.

Following the approval of the Ethereum ETF, crypto enthusiasts were considering the possibility of a spot in the SOL ETF. However, experts in the US expressed apprehensions about the token’s close ties with Solana Labs, which might lead regulators to perceive it more as a security/stock than a commodity asset. This could present potential legal hurdles. 

Subsequently, the U.S. SEC recently held a closed-door meeting with ETF issuers about whether the token might be classified as a security. Following discussions, CBOE decided not to submit the relevant 19b-4 form to avoid initiating the approval process. While VanEck’s S-1 registration statement for the Solana ETF is still on display, 21Shares’ has been withdrawn. 

Solana ETFs In the US

Although other cryptocurrencies like Bitcoin and Ethereum have approved ETFs, the likelihood of SOL ETFs being approved under the current administration is low, with experts suggesting it might not happen until 2025, if at all.

Despite these concerns, the buzz around Solana ETFs is palpable. The head of Digital Asset Research at VanEck remains bullish on SOL ETF despite CBOE removing its 19b-4 filing.

Furthermore, the Brazilian regulator’s approval has captured the attention of institutional investors and financial advisors, who are increasingly exploring avenues to offer SOL exposure to their clients. If successful, this could potentially accelerate the mainstream adoption of Solana and its ecosystem and further integrate its technology into global financial systems.

Solana’s Big Win: Brazil Launch Spot ETF

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The first-ever Solana spot ETF has landed in Brazil. In a groundbreaking development, the Brazilian Securities and Exchange Commission [CVM] has approved the spot ETF. This milestone is a significant step forward as the ETF, provided by QR—a prominent player known for its Bitcoin and Ethereum ETFs—will be managed by Vortx. At present, the ETF awaits final approval from B3, Brazil’s main stock exchange, It is expected to hit the market within 90 days.

The approval comes on the heels of the SEC’s recent endorsements of Ethereum ETF and Bitcoin ETF which have sparked a surge of institutional interest. Traditional media outlets like CNBC to investment titans like Franklin Templeton have been vocal about their optimism about the token. However, some experts expressed apprehensions about the token’s close ties with Solana Labs, which might lead regulators to perceive it more as a security/stock than a commodity asset. This could present potential legal hurdles. 

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Solana's Big Win: Brazil Launch Spot ETF 2

Despite these concerns, the buzz around Solana ETFs is palpable. Recent filings with the Chicago Board Options Exchange [CBOE] for the 21Shares Core SOL ETF and the VanEck SOL Trust have underscored the heightened interest of the market toward such funds. This highlights a shift towards more traditional financial instruments incorporating digital assets.

Solana ETF US launch Inches Closer

That being said, the Brazilian regulator’s approval has captured the attention of institutional investors and financial advisors, who are increasingly exploring avenues to offer SOL exposure to their clients. If successful, this could potentially accelerate the mainstream adoption of Solana and its ecosystem and further integrate its technology into global financial systems.

Looking ahead, the excitement does not stop here. The SOL exchange-traded funds (ETFs) have set the stage for potential launches in the United States around mid-March 2025 in the United States. This has sparked a flurry of speculation and anticipation within the crypto community, making this an exhilarating time for Solana and its investors.

As Solana edges closer to broader market acceptance, all eyes will be on how this new financial product performs and what it means for the future of digital assets.

Bitcoin Shakeup: Brazil Ousts Nigeria To Claim 2nd Spot

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Bitcoin’s popularity has reached new shores. Brazil ousted Nigeria, Africa’s largest economy, of the second spot, now trailing behind El Salvador, which has retained its position in the numero uno spot, a title held since 2022. The change in rankings for Nigeria is attributed to its growing preference for the USDT stablecoin over BTC, as indicated by Google Trends data.

The bullish sentiment towards Bitcoin in Brazil, the largest economy in Latin America, is well-established, with the flagship cryptocurrency witnessing a remarkable 160% surge this year. The enthusiasm has further intensified with the anticipation of approval for a spot bitcoin exchange-traded fund [ETF] in the United States. Brazil is experiencing an increased demand for such investment vehicles, which have been actively traded in the country for over two years.

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Bitcoin Shakeup: Brazil Ousts Nigeria To Claim 2nd Spot 4

The total assets under management [AUM] for these ETFs in Brazil have reached nearly $97 million as of November 21. Hashdex’s Nasdaq Bitcoin Reference Price FDI [BITH11] dominates the pack with $57.8 million in AUM, commanding a market share of around 60%. Marcelo Sampaio, CEO and founder of Hashdex attributes the success of Bitcoin ETFs in Brazil to pro-market digital asset regulation and growing interest from large institutions.

Banking Giant’s Entry Change Brazil’s Bitcoin Landscape

The recent entry of Itaú Unibanco, Latin America’s largest bank, into Bitcoin and Ethereum trading is seen as a pivotal moment by industry experts, signifying further acceptance of digital assets in the nation. Brazil, alongside the United States and Australia, is poised to achieve one of the world’s highest crypto adoption rates, given its population of 214 million, according to a study by HedgewithCrypto.

Conversely, Nigeria, while losing its second spot globally, remains a notable player in the crypto market, serving as a significant transactional tool. However, the nation is gradually ceding ground to more crypto-friendly countries such as the United Kingdom, the United Arab Emirates, and Brazil. Despite this shift, Nigeria continues to lead in cryptocurrency adoption in Africa and globally, boasting a 9% annual growth rate, according to a Chainalysis report. The country has consistently ranked among the top three nations with sustained growth since 2021.

Brazil’s Crypto Tax Revolution: Senate Nods to 15% Levy on Overseas Holdings

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The Brazil Senate approved new income tax regulations on November 29, paving the way for Brazilians to be obligated to pay up to a 15% tax on income derived from cryptocurrencies held on exchanges outside the country. This development comes as part of a broader initiative by President Luiz Inácio Lula da Silva’s administration to revamp income tax rules.

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Brazil's Crypto Tax Revolution: Senate Nods to 15% Levy on Overseas Holdings 6

Having already secured passage in the Chamber of Deputies, the bill is anticipated to receive final approval from President Lula, given that his administration initiated the changes in the income tax rule. Effective January 1, 2024, the new regulations stipulate that any Brazilian earning more than $1,200 (6,000 Brazilian reals) on exchanges outside Brazil will be subject to the tax.

Regulatory Shifts & Rising Crypto ETF Interest

This aligns foreign-held funds with the same tax rate applicable to domestically-held funds. Notably, funds earned before this date will be taxed upon access by the owner, with earnings on funds accessed before December 31 taxed at 8%.

The scope of the bill extends beyond individual cryptocurrency holders. It also impacts “exclusive funds,” referring to investment funds with a single shareholder and foreign companies active in the Brazilian financial market. The government aims to generate $4 billion (20.3 billion Brazilian reals) in revenue from these measures in 2024. However, not everyone in the Senate favors the bill, with Senator Rogério Marinho expressing opposition.

This move follows the September announcement by Roberto Campos Neto, the Banco Central do Brazil governor, revealing plans to tighten cryptocurrency regulations in response to their surging popularity. At the time, Campos Neto expressed concerns about potential tax evasion facilitated by using cryptocurrencies.

The regulatory landscape for cryptocurrencies in Brazil has been evolving throughout the year. In June, President Lula signed government decree No. 11.563, granting the Brazilian central bank jurisdiction over virtual asset service providers. This decree established rules under a December 2022 law, providing a legal framework for cryptocurrencies in Brazil.

It empowered the Central Bank of Brazil to regulate and supervise virtual asset service providers, ensuring that token projects qualifying as securities continue to fall under the purview of the Comissão de Valores Mobiliários (CVM), Brazil’s equivalent of the United States Securities and Exchange Commission.

While navigating this regulatory shift, Brazil is concurrently witnessing a significant demand for spot Bitcoin exchange-traded funds (ETFs), a trend that has persisted for over two years. This growing interest in crypto-related financial instruments among Brazilian investors underscores the changing landscape of digital asset acceptance.

The decision to tax income from cryptocurrencies held abroad signals a landmark change in Brazil’s regulatory approach to digital assets. As the government seeks to boost revenue through these measures, the opposition from some quarters highlights the contentious nature of cryptocurrency taxation.

However, Brazil’s journey through this evolving regulatory terrain is paralleled by the increasing acceptance and interest in crypto-related investment products, exemplified by the surge in spot Bitcoin ETFs.

Related Reading | U.S. Bitcoin ETF Battle Has A New Contender

OKX Launches Cutting-Edge Exchange In Brazil

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OKX, the second-largest offshore exchange globally, has officially introduced its cryptocurrency exchange and Web3 wallet platform in Brazil, aiming to provide a secure and trustworthy gateway for Brazilian users to access decentralized finance [DeFi] and engage in cryptocurrency trading. The platform’s launch also includes the incorporation of Brazilian Real fiat-on ramp capabilities for users.

In accordance with the press release, the OKX Exchange in Brazil stands out by offering a robust platform that enables users to trade hundreds of cryptocurrencies. It goes beyond basic trading functionalities, featuring advanced options such as staking rewards and seamless integration with the decentralized finance ecosystem.

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OKX Launches Cutting-Edge Exchange In Brazil 8

Alongside the exchange, OKX has unveiled the OKX Wallet on the platform. This Web3 wallet serves as a secure self-custody portal, allowing users to access and manage various DeFi products, trade non-fungible tokens [NFTs], utilize decentralized applications [dApps], and more. The wallet boasts being the first of its kind, incorporating both Multi-Party Computation [MPC] technology and Account Abstraction [AA] features. This unique combination opens the door for broader adoption, particularly among users who may be less technically inclined.

OKX President Hong Fang expressed enthusiasm about the official launch of the localized platform and services in Brazil, highlighting the country’s position as the largest cryptocurrency market in Latin America. The platform now provides Brazilian traders with access to BRL rails, deep liquidity, security tools, and transparency, addressing the specific needs of the local market. The OKX Wallet, with its simplified access to DeFi, NFTs, dApps, and more, is positioned to contribute to the innovation and growth of the Web3 and crypto economies as the Brazilian market matures.

OKX Brings Cryptopedia To All Devices

Simultaneously, the cryptocurrency exchange has expanded its endorsement for Cryptopedia to encompass the desktop iteration of the OKX Wallet, in addition to the existing app version. The inclusion of Cryptopedia support on the web rendition of the OKX Wallet now enables users to avail themselves of the learn-to-earn platform on various devices, allowing them to engage in the ongoing seasons of Cryptopedia through the web version.

In addition, the trading platform teamed up with custody provider Komainu and asset manager CoinShares. The recently formed partnership seeks to enable round-the-clock trading of segregated assets while addressing counterparty risks that have been identified as a significant hurdle for institutional traders.

Binance And Mastercard Join Forces To Launch Crypto Card In Brazil

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Through its numerous advances and initiatives, the leading cryptocurrency exchange Binance has paved the way for cryptocurrency acceptance. The introduction of the Binance card, which enables users to utilize cryptocurrency for a variety of purchases, is one such initiative.

A law recognizing cryptocurrencies as valid payment options in Brazil was recently enacted. Prepaid cryptocurrency cards were jointly introduced in Brazil by Binance and Mastercard to make the bitcoin game easier for the country’s people.

The global cryptocurrency exchange has announced the arrival of the Binance card in Brazil in collaboration with Mastercard, according to the specifics. The card is now under beta testing as well and will be available to the general public in a few weeks.

The card, which is issued by Dock, enables existing and new exchange customers to utilize bitcoins to pay bills and make purchases at more than 90 million Mastercard outlets worldwide.

During the buying process, users of the exchange will also be able to convert cryptocurrencies to fiat money in real-time. Additionally, users will be able to receive 8% cash back in cryptocurrency. More than 15 cryptocurrencies, including BTC, ETH, BNB, BUSD, SHIB, MATIC, LINK, ADA, and others, are now supported by Binance Card for payments.

Binance Blocks Several Accounts: Bitzlato Case

Due to the Bitzlato probe, Binance, the largest cryptocurrency exchange in the world by market cap, has suspended many accounts. Numerous users, many of whom speak Russian, reported the problem. In a Telegram group conversation, the impacted users complained about the issues and claimed that the accounts had been abruptly terminated. Over 1000 people are now a part of the organization.

The aggrieved users contrast the limits with the punitive action taken by the US Department of Justice against the cryptocurrency firm Bitzlato. Furthermore, a lot of people acknowledge using Bitzlato for both incoming and outgoing transactions between Binance and Bitzlato.

A spokesman for the exchange confirmed to local media that the current account blocking was connected to the Bitzlato case. The cryptocurrency exchange also suggested that users read Binance’s blog post on the various reasons why their account can be deactivated as well as what to do in such a situation.

Bitcoin Now Officially A Mode Of Payment In Brazil

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Prices for cryptocurrencies like Bitcoin are still far from recovering. At the time of publication, the market’s total value of all cryptocurrencies had changed by just 0.09% over the previous day and was $809.49 billion. Additionally, the value of Bitcoin did not change over the previous day; it was last spotted trading at $16.8k on Thursday. Amidst this downside, Brazil gives hope to crypto enthusiasts.

The official journal of the federal government reports that Brazilian President Jair Bolsonaro enacted a law on Thursday morning. The law establishes a thorough regulatory framework for the use and exchange of cryptocurrencies like Bitcoin (BTC). In addition, the law won’t take effect for 180 days.

The legislation, which had previously been approved by Congress, was passed by President Bolsonaro with no modifications. The new laws state that cryptocurrencies are a digital representation of value. In the South American nation, digital assets are accepted as a means of payment and as a form of investment.

According to the bill, a virtual asset is,

“a digital representation of value that can be negotiated or transferred electronically and used for payments or as an investment.”

No cryptocurrency, including Bitcoin (BTC), is recognised as legal cash by the new law. Which government organisations will be in charge of overseeing market regulation will be decided by the executive branch. When using cryptocurrency as a payment method, it is envisaged that the Central Bank of Brazil (BCB) will be in charge. The securities and exchange commission (CVM) will be in charge of regulating cryptocurrency investments. The BCB, the CVM, and the federal tax authority (RFB) all helped to draught the reform legislation.

More Assets To Join Bitcoin In Brazil?

If the BCB is recognised as the sector’s watchdog, the outlook is not good. The legal definition of a virtual asset cannot be changed by the regulator. There is no reason for the BCB to take extra steps to encourage the adoption of cryptocurrencies, nevertheless. Additionally, Roberto Campos Neto, the organization’s president, has voiced his disinterest in cryptocurrencies as a workable substitute for traditional currency. Volatility is one of the main causes of Neto’s lack of faith, according to him.

Regardless, a legal framework for the cryptocurrency market ought to encourage more open discussion regarding cryptocurrencies.

Cryptocurrency Regulatory Bill Soon To Be Law In Brazil; Chamber Approves

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A bill governing cryptocurrency transactions was approved by the Brazilian Senate’s full body in April of this year. Senator Flávio Arns’ bill was presented to the Brazilian Chamber of Deputies, which then took a vote on it.

The bill gives cryptocurrency businesses the designation of “virtual service providers,” making them accountable for crimes against the Brazilian financial system in the same ways as traditional financial institutions.

Arns’ bill was accepted by the economic affairs committee of the Brazilian Senate in February, while two other crypto initiatives put up by senators Styvenson Valentim and Soraya Thronicke were shelved.

The bill also establishes a two- to a six-year prison sentence as the maximum punishment for crimes committed using virtual assets. In response to a request from Senate President Rodrigo Pacheco, the sentence that was originally proposed would have ranged between four and eight years.

Cryptocurrency Regulatory Bill Awaits Executive Sanction

On Tuesday, the Chamber of Deputies passed the fundamental language of the Bill, which governs the Brazilian cryptocurrency market. The matter will now be sanctioned by the president.

In accordance with the legislation, businesses have 180 days to adjust to the new regulations before the bill takes effect. The deputies also rejected the focus that demanded segregation of property.

The issue relates to the market authority of regulatory organizations. The project states that the Securities and Exchange Commission will be in charge of overseeing crypto-assets that are classified as securities, while another body that will be chosen by the Executive Branch would be in charge of overseeing assets that do not come under this classification. The selection of the Central Bank is anticipated.

The SEC recently released an opinion to the market with recommendations on how to invest in crypto assets that are regarded as securities in light of the delay by Congress in implementing the PL. The text also outlines the regulator’s scope of authority and suggests methods for standardizing, inspecting, supervising, and disciplining market participants.

The PL that was adopted today had already been authorized by the Senate in April, but it got stuck in the Chamber in June, and even though it repeatedly appeared on the voting agenda, it wasn’t approved again until today, nearly six months later. There was disagreement over some textual issues, particularly those pertaining to patrimonial segregation.

Brazil’s New Proposal Will Make Payments in Crypto Legal

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A proposed amendment to Brazil’s legislation would allow Brazilians to utilize cryptocurrency as a form of payment while also shielding their private keys from being seized by the courts.

On Friday, Federal Deputy Paulo Martins submitted the idea to the country’s legislature. If passed, the measure would broaden both the legal uses of cryptocurrencies in Brazil as well as the ability of courts to seize them.

While crypto-assets are not a currency in and of themselves, they could be “used as a financial asset, means of exchange or payment, or instrument of access to goods and services or investment,” according to the proposed addition to Article 835 of the Civil Procedure Code.

Brazil’s new proposal will not make crypto a legal tender

It would not make Bitcoin or any other cryptocurrency legal tender in the nation. Instead, it would make cryptocurrency a legally recognized financial instrument that could be used for investments and other purposes.

According to one interpretation of the plan, cryptocurrencies like Bitcoin (BTC) and Ether (ETH) might be used to pay for products and services all around the country. It might also be used to settle outstanding debts “in the case of a crypto asset offering or forced restriction.”

The plan also covers the new rights and restrictions that Brazilian courts will have once a cryptocurrency is recognized as a financial instrument, such as the ability to freeze exchange accounts.

However, the proposal does not grant the court the authority to seize users’ private keys:

“The following regulations shall be followed: The Judiciary will not have access to the users’ private key.”

To ensure the payment’s authenticity, the debtor would have to transmit it to the court’s wallet. The proposal is silent on how the court would get cryptocurrency from self-held wallets.

The court would have the right to order “intermediaries” such as exchanges to freeze the debtor’s crypto assets if they retain their crypto on exchanges.

The proposed amendments are still being debated in the country’s legislative chamber, the Chamber of Deputies. This means the Senate may take several years to pass the amendments and the president to sign them into law. They may have radically changed by then.