The Brazilian Securities Commission (CVM) has opened the door for investment funds to partake in cryptocurrency investments. A new set of rules was released by the organization that allows financial investment funds access to crypto-based tokens, offering the same protections as stocks and bonds.
CVM Regulates Funds Investment in Cryptocurrency
Brazil’s government has taken another step toward the adoption and regulation of cryptocurrencies as investment instruments. The Brazilian Securities Commission approved a new set of regulations that permits established funds to invest in cryptocurrencies. This opens up a fresh market for these organizations.
The rules were then enacted. President Jair Bolsonaro signed a law regulating investments in cryptocurrencies to ensure they are safeguarded in the same way as other investment assets such as bonds and stocks.
The authorized framework especially requires that cryptocurrency operations only be carried out on exchanges that have been approved by the Brazilian Central Bank or the country’s CVM. If these investments are done in another nation, they must be overseen by a local regulator.
In any case, these institutions will have the legal power to inspect and supervise the operations they conduct, including preventing abusive practices in the market, as well as money laundering and the financing of terrorism and weapons of mass destruction.
However, assets cannot be added to the portfolio as they must be in the approved categories of the cryptographic law.
Adoption and Regulation are Evolving
Institutions in the country are happy to see the new framework being issued only days after the nation’s cryptocurrency law was passed. Brazil is eager to regulate the standing of these assets in different areas. The pivot itself was a denial of funds’ opportunity to invest in cryptocurrency in 2018.
The law was amended by the commission months later, to permit funds to invest, although indirectly, in cryptocurrencies abroad. Both citizens and businesses have displayed significant adoption of crypto. Nearly 42,000 firms purchased cryptocurrency during October, according to the Brazilian tax authority (RFB).
The same purchase record was broken by people during September when almost 1.5 million people bought cryptocurrencies. This popularity has led to many digital and traditional institutions offering crypto services or planning to offer them in the future. Nubank, Itaú, and Santander, as well as a digital version of the Brazilian fiat currency, are currently under development.
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