Jayme Petra
Lawyer at Marcos Martins Advogados
Every economic effect has an associated legal effect. In this sense, the role of the state becomes fundamental for proper financial regulation in the country. However, all of this has been put to the test since the emergence of cryptocurrencies in 2008, shortly after the US banking crisis, which revealed the fragility of the financial system.
Today, it is speculated that there are already more than 6,000 cryptocurrencies – around 30 times more than the currencies issued by governments. Almost every day a new one appears, now with more sustainable appeals, as the amount of energy needed for mining has raised awareness of environmental issues. According to the Coin Market Cap website, the total value of all cryptocurrencies was US$1.44 trillion in July of this year. Bitcoin alone accounts for 47% of this total.
Brazil has stood out in this scenario. According to a Hashdex survey carried out in September, there were 325, 000 cryptocurrency investors in Brazil – almost 1,000% more than in September 2020, when there were only 30,000 investors.
Almost all of these investors do so as an alternative to the traditional financial market. Most of these amounts are intended for personal financial reserves, leaving aside traditional market options such as savings, fixed income or even shares.
The volume traded is already so high that the collapse of the cryptocurrency system would have a major financial impact on thousands of people around the world. There is a risk of impoverishing entire nations.
In this context, regularization is an urgent and unavoidable debate. There is a revolution in the global monetary system underway and we need to talk about it. The government needs to be attentive to the legal security needs of these exchange and payment relationships carried out through digital assets.
Although the Central Bank of Brazil has not signaled any action on the subject, there are already bills in the Senate and the Chamber of Deputies with the aim of creating legislation on the market and ways of accepting cryptocurrencies in the Brazilian economy – something that is already being done in some establishments, but still in a very timid and isolated way.
But the fact is that we are far from a coherent debate, which should be global and not just local. Cryptocurrencies are issued and traded transnationally, which requires a universal effort to establish rules that provide more legal certainty – but without creating excessive restrictions that could inhibit innovation in a segment that is gaining more and more followers.
Some movements can already be seen in other countries. In October 2012, the European Central Bank (ECB) presented a strict definition of virtual currencies that classifies them as “a type of unregulated digital money that is issued and usually controlled by its developers and used among members of a specific virtual community”.
The first US position on cryptocurrencies was in 2013, with the publication of interpretative guidance on how virtual currencies could fall under the US Bank Secrecy Act, the law that governs the operation of financial institutions in the country.
In China, the ownership or transfer of cryptocurrencies is not prohibited. However, in May of this year, several provinces ordered a ban on activities related to cryptocurrency mining. On the other hand, in June 2021, El Salvador approved a bill legalizing only Bitcoin. The justification is to boost the country’s economic growth, following exclusive free market criteria.
These few reflections show that we still have a long way to go. Regulation will not only guarantee more adequate mechanisms for tax laws, but above all to prevent money laundering schemes, corruption and even terrorist actions. It is necessary to supervise and inspect those who issue and intermediate the cryptocurrency economy in order to guarantee more legal certainty for consumers, who today find themselves in a situation of extreme vulnerability and high risk.
