Hello Games Magazine Brazil’s friends, it’s a pleasure to be back. Thank you for having me!
I am here today to briefly comment the cryptocurrency legislation passed by the Senate this week. This is the bill of law PL 3825/2019, an initiative of Senator Flávio Arns, from the State of Paraná.
It is important to recall that this bill of law, approved at the Senate, dragged rules from the bill of law PL 2303/15, an initiative of Federal Congressman Aureo Ribeiro, elected by the State of Rio de Janeiro. I am able to say that I know this mentioned bill of law (PL2303/15) pretty well, as I had the honor to speak in front of the special committee for Crypto regulation of the House of Representatives as “specialist”, as well as some lectures and classes about this subject. One of them, by the way, was quite interesting; when he shared the stage with Congressman Aureo Ribeiro himself, author of the bill of law, in the auditorium of the State University of Rio de Janeiro - UERJ.
When I spoke at the special committee (the reader will have the opportunity to check it out at the following link: https://youtu.be/U6uHpxsOEYo), I made a point of showing the Congressmen that the “crypto economy” is not an instrument of money laundering or committing crimes. Anyone who wants to money laundry does so with any business, from a pizza house to a “car-wash”, from a horse farm to a jewelry store. Cryptocurrencies does not commit crimes. People do, whatever is the chosen vehicle for the crime.
Money laundry can happen using cash, gems, paintings and even horses and bulls’ sperm, as well as any object that expresses value; and there was not (and still there isn’t) any legislative initiative seeking the limitation of selling fine jewelry, painting auctions or cattle raising, for example.
I must highlight that the use of bottles to create Molotov cocktails (petrol bombs) never encouraged a special regulation from the Government for the sale of glass bottles. It makes no sense to seek limitation for crypto assets because of eventual and marginal criminal usage of it.
From a libertarian point of view, it is important to say, any regulation is bad. The driving ideas of cryptos were privacy and decentralization. A state regulation target specifically the end of this anonymity and the centralization of the information to the hands of the Government or to large financial power groups. The State also seeks to know people's assets and the idea of accumulating wealth in crypto assets, anonymously, is definitely something that no Government will ever support.
The bright side of this is the fact that the Law was short enough to not be exhaustive, delegating to the Federal Government the regulation of many controversial points. This is important because the legislative process is much, much, much, much..... longer than a decree, an ordinance or any normative vehicle of a lower hierarchy. We cannot deal with legislative delays when it comes to technology. Let’s look again to the bill of law #2333 from 2015. Since then, how many things were created and how many does not exist anymore. Some were born and have died between 2015 and 2022. This dynamism is essential when dealing with technology.
In concrete terms, the bill of law also designates as financial institutions natural persons who provide “crypto services”, what impose to these persons not just specific rules, but quite severe ones. This is a point that deserves attention from operators.
A very interesting thing is the reduction to zero the federal import taxes over equipment designed to for mining. It is an interesting step, notably in the opposite direction to what we see in Europe, for example, where mining has been demonized for having been (wrongly) called as an enemy of the environment. Of course, the European reality is different than ours, mainly because of the energy matrix. They burn coal to charge the “Eco-Friendly Tesla”.
The exemption is conditioned to the sustainability of mining, of course, but it is still a very interesting step. Congratulations to the legislator.
Let's wait for the next steps. Now it will be sent to the Congress (House of Representatives). If nothing changes, it goes to the President of the Republic, who must sanction the bill of law.
A big hug and see you soon!
Witoldo Hendrich Jr.
Legal Director and Partner - Online IPS
