Updated data from Brazil’s Federal Tax Office shows that more than 1.3 million individual investors declared cryptocurrency transactions in August this year, about three times the number that declared such transactions in August last year (439,626).
However, the financial volume of these transactions dropped 33 percent to BRL 11 billion (USD 2.1 billion) due to a recent cryptocurrency devaluation.
There was also a drop in the volume traded by Brazilian exchanges, today the only ones required to report operations to the Federal Tax Office. They traded BRL 7.8 billion, 31.5 percent less than in August last year.
The market is apprehensive about the verdict of the Brazilian Securities and Exchange Commission, CVM, on a bill that seeks to regulate crypto assets. The bill was approved in the Senate but has stalled in the House.
The proposal would turn crypto exchanges into financial institutions, meaning they would only be able to operate with regulatory approval. It also submits crypto traders to anti-money laundering rules.
According to the CVM’s current definition, crypto assets are encrypted virtual assets, present exclusively in digital records and transactions executed and stored in a computer network. Bitcoin and NFTs, two of the most popular assets among Brazilian investors, fall under the concept, hence the need for regulation.
Article 3 of the bill currently under consideration in the House does not explicitly say that tokens are investments and securities. And according to article 1, the new rules would be outside the CVM’s jurisdiction. Lawmakers, exchanges, and investors hope the CVM will clarify all these points in a report due to be sent to the House.
When questioned by The Brazilian Reportthe CVM said that there is no deadline for submitting its analysis.