As discussions continue among Brazilian lawmakers regarding a bill aimed at offering robust protection to a significant portion of debtors’ savings assets, a separate initiative is seeking to include cryptocurrency holdings within the scope of this protective legislation.
The proposed bill, numbered 4.420/2021 and authored by Deputy Carlos Bezerra, is currently undergoing consideration by the Constitution, Justice, and Citizenship Committee of the lower chamber of the Brazilian Parliament. This bill seeks to amend the Code of Civil Procedure, which was issued in 2015, with the primary objective of safeguarding the private savings of individuals from potential seizure by creditors. Specifically, it proposes protecting savings of up to an amount equal to 40 minimum wages.
On September 15, Deputy Felipe Francischini, the rapporteur of the bill, officially confirmed his agreement with an amendment suggested by Deputy Fernando Marangoni. This amendment, which has garnered support, calls for the inclusion of cryptocurrency assets in the list of protected funds. According to Francischini, this expansion is warranted due to changing investment behaviors, with traditional savings accounts losing ground to alternative forms of financial investment.
The inclusion of cryptocurrency assets in this protective legislation became feasible following the implementation of Brazil’s comprehensive crypto regulatory framework in June 2023. This framework provided a legal definition for virtual assets, categorizing them as “digital representations of value that can be traded or transferred via electronic means and used for making payments or investments.”
The recognition of cryptocurrencies as a form of real money within the regulatory framework has significant implications for their treatment under various legal and financial contexts. In this case, it paves the way for extending asset protection to crypto holdings.
While the acknowledgment of cryptocurrencies as legitimate assets deserving of protection is a positive development for the crypto community in Brazil, it is important to note that this recognition also has its challenges. In August, a congressional committee in Brazil approved amendments to a bill designed to increase taxes on cryptocurrencies held overseas.
This proposed tax hike, if enacted into law, would affect individuals and businesses involved in international cryptocurrency transactions. It reflects the government’s attempt to regulate and tax the growing crypto market while also addressing potential revenue loss due to the increasing popularity of digital assets.
The move to include cryptocurrency holdings within the protective scope of the asset protection bill highlights the evolving nature of investments in Brazil and worldwide. Traditional savings accounts have seen competition from a wide array of financial instruments, including cryptocurrencies, as individuals seek diverse and potentially higher-yield investment options.
This legislative initiative recognizes the importance of adapting legal frameworks to accommodate these changes in investment behavior. By doing so, lawmakers aim to provide individuals with a level of security for their savings, regardless of the form in which they choose to invest.
As Brazil navigates the intersection of cryptocurrency regulation and taxation, the inclusion of crypto assets in the asset protection bill showcases a willingness to adapt to the evolving financial landscape. This development reflects a broader global trend, where governments and regulatory bodies grapple with the challenges and opportunities presented by the burgeoning cryptocurrency market.
While the tax implications of cryptocurrency recognition remain a point of contention, the extension of asset protection to crypto holdings underscores the significance of cryptocurrencies as legitimate financial assets in Brazil. As discussions and debates continue within the Brazilian Parliament, stakeholders in the crypto space will be closely watching to see how these legislative initiatives ultimately shape the future of digital asset regulation and taxation in the country.
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Retrieved from: https://www.cryptopolitan.com/brazil-adds-crypto-to-asset-protection-bill/ (17/11/23)
