The mayor of Rio de Janeiro will allow tax payments in Bitcoin but will require cryptocurrency exchanges to establish physical headquarters. Changpeng Zhao thinks that cryptocurrencies will be everywhere and become a usual payment method within twenty years.
Changpeng Zhao, the CEO of Binance, recently met with Roberto Campos Neto, the president of the Central Bank of Brazil. They held a videoconference to strengthen the presence of Bitcoin (BTC) and other cryptocurrencies.
The meeting between Changpeng and Campos Neto may signal that they are preparing for the Brazilian Bitcoin Law. The bill is just one step away from receiving approval after the Senate floor gives the go-ahead.
The Meeting Focuses on the Bitcoin Law
In late April, the bill to regulate cryptocurrencies in Brazil indicated that the Executive Power would choose the responsible regulatory agency. The Central Bank may be in charge of supervising exchanges and other digital asset service providers.
However, the financial institution has advanced in developing guidelines for supervising cryptocurrency transactions in Brazil.
The highest monetary authority reportedly addressed a new order to all financial institutions. Local media outlets reported that the Central Bank frames Bitcoin and other cryptocurrencies as investment vehicles.
Exchanges would have to follow the rules of other investment funds regulated by the Brazilian Securities and Exchange Commission (CVM). For that reason, everyone would need to have a physical headquarters in the country to operate. In addition, they would have to keep records and documents that support the digital transactions they handle.
The Brazilian Central Bank Takes Measures Due to Problems with Binance
Fabio Braga, a Brazilian lawyer, believes that the Central Bank aims to identify and segregate product and service providers. He said they seek to classify them as having high and poor technical and operational quality, with greater transparency and accountability.
The recent case in which Banco Santander sued Binance may have led to that measure. The financial institution alleged that the exchange obstructed the investigation of around BRL 30 million diverted from a bank account of steel company Gerdau.
Binance argued technical inability to identify those responsible for the Bitcoin wallets involved in the alleged money theft in April 2020. Seven months after Santander appealed, the cryptocurrency exchange lost. Before the judicial decision, the platform had stated that it could not provide the data but then did it in less than two hours.
Latin Americans Use Cryptocurrencies to Fight against Inflation
Latin America is a territory with a growth opportunity for cryptocurrencies as its population has fought intensely against inflation.
In March, Changpeng Zhao met with Nayib Bukele, the president of El Salvador, and Eduardo Páes, the mayor of Rio de Janeiro. The latter said he would accept Bitcoin for tax payments but require exchanges to establish physical offices.
Although there were no apparent agreements to promote the adoption of Bitcoin in Uruguay, Zhao met with president Luis Lacalle Pou.
The above meetings have led the CEO of Binance to state that cryptocurrencies will be everywhere within twenty years. He explained that Bitcoin has not yet replaced traditional money, but 15-year-old teenagers will use it as a payment method when they turn 35.
By Alexander Salazar
