Brazil And Other Latam Countries Move To Regulate Crypto

In light of the crypto winter and the other problems that have surfaced in the industry as a whole, a number of countries have decided to move ahead when it comes to introducing regulation.

Latin America has become well-known as a region that has seen rapid adoption of cryptocurrencies and is being regarded as a powerhouse for the nascent industry.

Therefore, it is not surprising that Latam regulators have also established the foundations for regulating the crypto market this year.

Brazil’s regulation

Some of the biggest crypto firms in Latin America are based in Brazil, which includes Nubank and Mercado Bitcoin.

As a matter of fact, Brazil is regarded as one of the biggest crypto hubs in Latam and last week, a crypto bill was signed by the president of the country.

According to the new bill, it will now be legal for people in the country to use digital assets to make payments for goods and services.

However, it should be noted that digital assets will not be granted the status of legal tender. Most importantly, Brazil is not the only country in the region that is working on regulating the crypto space.

Other countries

Other than Brazil, some of the other countries that are also working on establishing their own crypto regulations include Argentina, Guatemala, Honduras, Paraguay and Panama.

The province of Mendoza in Argentina has already begun accepting bitcoin and other cryptocurrencies as a payment method for goods and services and digital currencies are also used to pay for taxes and other fees.

Since a lot of crypto innovations have taken place, many countries have gone as far as introducing new locations, such as the Bitcoin Valley in Honduras.

With the launch of such innovations, it has become essential that regulations be introduced to back them up.

Amongst all these countries, El Salvador appears to be in the lead, as it declared Bitcoin as a legal tender in the country back in September 2020.

Global crypto regulation

The fragility of the Web 3.0 world was exposed in the crypto winter this year, as there have been a number of high-profile bankruptcies and implosions that have taken place in 2022.

These incidents include the depegging of the TerraUSD (UST) stablecoin that wiped out the entire Terra ecosystem.

Companies like Three Arrows Capital (3AC), Voyager Digital, and Celsius Network all ended up filing for bankruptcy within weeks and months of each other.

Therefore, it is not surprising that global regulators have now become more concerned and wary about the impact of crypto bankruptcies on investors and the overall financial system.

Japanese regulators have taken a tough stance towards stablecoins, after the collapse of the Terra ecosystem.

Likewise, US regulators have also been working on developing regulations on the executive order of President Joe Biden that was issued earlier this year.

While the industry has become concerned about the regulatory approach being taken, most experts believe that it is unlikely to have any impact on the growth of Bitcoin.