Brazil Targets Illegal Bitcoin, Stablecoin Use Through New Proposals

Brazil's government and central bank are tightening rules on crypto use to address criminal activities. A new rule proposed by the central bank states that transactions involving virtual assets pegged to fiat currency will be classified as foreign exchange operations. This new regulation aims to enhance monitoring and control over the use of stablecoins, which are digital tokens linked to stable assets, typically US dollars. Furthermore, President Luiz Inácio Lula da Silva introduced a bill to congress that would permit authorities to seize virtual assets during investigations and convert them into fiat currency. Central bank President Gabriel Galipolo has previously expressed concerns regarding the opaque nature of crypto transactions, especially in relation to taxation and money laundering. These regulatory moves come as Brazil positions itself as a significant player in the digital asset market, emphasizing the need for stricter oversight amidst rising criminal use of cryptocurrencies.

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