Brazil passed a bill to regulate cryptocurrencies as Bitcoin struggles to take off in El Salvador

NEW DELHI (CoinChapter.com) — Brazil’s Senate passed a bill to regulate cryptocurrencies as the country sets the stage to create a regulatory framework for its crypto industry.

The Senate passed the bill in a plenary session. However, the bill still needs approval from the Chamber of Deputies and then a sign from President Jair Bolsonaro to become law.

Federal Deputy Aureo Ribeiro first proposed the bill to regulate cryptos in 2015. However, the bill approved on Tuesday combined Senator Ribeiro’s bill with Senator Arns’s bill PL 3825/2019. During the deliberation, the Senate confirmed that Brazil’s executive branch would formulate rules for crypto assets.

The government would likely create a new regulator for cryptocurrencies or might delegate the responsibility to Brazil’s Securities and Exchange Commission (Comissão de Valores Mobiliários or CVM) or the Central Bank of Brazil (Banco Central do Brasil or BCB).

Also Read: EU Lawmakers want Bitcoin (BTC) mining banned: Favor Ethereum (ETH) instead.

The bill’s author, Senator Arns, also focused on appropriate punishment for crypto-related crimes. He suggested scaling penalties according to the amount of fraud, money laundering, and other crimes.

Furthermore, the Senate also discussed incentives for crypto miners, suggesting tax exemptions for crypto mining companies to set up shop in the country. Brazil’s bill to regulate cryptos passed on Tuesday would likely become law by 2022 end.

Meanwhile, El Salvador’s Bitcoin Troubles

Bitcoin is struggling as a legal tender in El Salvador, the first country to adopt Bitcoin as legal tender, suggests a new report. A survey by the National Bureau of Economic Research shows that not many people in the country are using BTC.

Researchers Fernando E. Alvarez, David Argente, and Diana Van Patten spoke to nearly 1,800 households, asking them about their spending habits post-BTC adoption. The report states Bitcoin usage in everyday transactions is low.

Moreover, the ‘banked, educated, young, and male population‘ of the country accounts for most BTC transactions.

The report adds that only 20% of the respondents used the Chivo wallet after downloading it. Furthermore, only 10% of respondents reported spending less cash, and 11% reported using fewer debit or credit cards.

Also Read: Australian Bitcoin ETF delayed due to an unidentified broker.

We do not find evidence of Chivo Wallet being used to pay for taxes or to send remittances at a significant scale. This is consistent with reports from the Republic’s Reserve Bank of El Salvador, which found that only 1.6% of remittances went through digital wallets in February 2022

The report noted

Last year, the government encouraged its citizens to adopt Chivo, offering $30 worth of BTC. However, most people surveyed just spent the Bitcoin before ditching the wallet. In addition, the report states only 20% of firms were accepting Bitcoin as Bitcoin.

Of the businesses that do accept Bitcoin, most end up converting it straight to dollars, said the report.