mining and circulation of cryptocurrencies
in Brazil, whereas this is not the final
position of the regulatory entities.
We will have to wait for the final result
of the procedure in order to verify how the
local authorities will deal with this subject.
The Brazilian Central Bank issued
Notice 25,036 in 2013 in which it indicated
that virtual currencies (cryptocurrencies)
are not to be confused with electronic
currencies (used in payment arrangements).
Until now, the entity saw no reason to
intervene in the market, given that it is too
small to pose any threat to the Brazilian
economy as a whole.
BACEN also expressed its views on
the subject in Notice 31,379 issued on
November 16, 2017,
used as a means of international transfers.
Exchange regulations and the elaboration
of Financial Operations Registry, essential
in the performance of foreign exchange
operations, still have to be observed
in order to make foreign exchange
transactions, regardless of the instrument
being used by the involved parties.
In addition, the Brazilian Securities
and Exchange Commission (CVM)
also expressed its views on the use of
cryptocurrencies in its market note on
Initial Coin Offerings (ICOs), indicating
that, depending on their content, the ICOs
must be approved by the agency.
those applied by the Securities Exchange
Commission in order to identify which
ICOs must be presented. This criteria,
known as the Howey test, seeks to verify
a security using three questions:
of resources?
arising from the efforts of third parties,
and not from the investor?
a yes, the negotiated token shall be
considered as a security, and consequently
CVM procedures must be observed.
The Brazilian Internal Revenue
Service has also positioned itself on the
taxation of cryptocurrencies in a very
clear way: the purchase and mining must
be included in the Annual Income Tax
Declaration and the income tax over
the capital gain generated by the sale
of cryptocurrencies must be collected.
R $35,000 in the year), and the applicable
rates depend on the earnings generated
during the year.
dealt with this technology to date, one
can verify that the regulation of the use
of cryptocurrencies in Brazil is a work in
progress, including the use of blockchain,
which is also taking its first steps.
What can be expected regarding the
regulation of this technology in the future?
Taking into account the main concerns
of public entities, the following things
come to mind:
of cryptocurrencies, and how this
instrument must be treated in each
situation;
laundering prevention and know-your-
customer policies for cryptocurrency
exchanges;
cryptocurrencies in general trade and
their role in the national financial
system;
reporting of information by individuals
and legal entities that deal with
cryptocurrencies, in particular
exchange companies; and
security parameters for users of
cryptocurrencies.
situations that can be regulated, but each
of these points is sure to require a lot of
discussion in the future.
The only certainty we have at the
moment is the fact that the market is
moving forward, and regulation is always
running behind. We can only follow the
development of this subject and take the
necessary precautions so that the future
regulation of this technology is useful for
everyone involved.
4 Question 447 -
5 idg.receita.fazenda.gov.br/interface/cidadao/irpf/2017/
version-1-1-03032017.pdf