Recently the government of Brazil decided to supposedly regulate cryptocurrency related activities. Since then, the Brazilian cryptocurrency market had a turbulent week and is now recording profits for its investors, the federal government has established the legal framework for the cryptocurrency sector and appointed the Brazilian Central Bank as the regulator of the country's digital financial activities. In fact, the initial proposal is intended to protect investors by focusing primarily on operators rather than investors.
Companies will have to strengthen their operational structure during this initial phase as well as examine their administrative components, simple measures such as registration in the CNPJ (Cadastro Nacional de Pessoa Jurídica) and stricter requirements such as minimum capital, operational systems, and an extensive business plan can significantly reduce or even stop fraudulent activities, opening up more opportunities for companies that adhere and follow the best practices in the market. This in my thinking can attract and keep investors who previously shied away from the market due to fraud and scams, as the activity develops. One example is family members who refuse to invest in cryptocurrencies, accustomed to news about new scams and pyramid schemes.
Possible end to the fraudulent pyramid scheme?
The regulation, overseen by the Central Bank, would only increase the security of services provided on Brazilian soil and strengthen the trajectory already being traveled by businesses working with cryptocurrencies.
Thus, in general, the regulation of cryptocurrencies strikes a balance between financial innovation and the protection of investors' interests, which only encourages the expansion of the market in a healthy and prosperous way. However it is possible that this does not exclude all fraudulent content, since this type of scam always seems to be something serious, around a promising project, promising extraordinary profits or a little above average, my biggest concern is perhaps not about the possibility of the scam itself, but about the emergence of new Brazilian cryptocurrencies with this purpose. As the world has already realized, Brazil is not so dedicated to the creation of digital assets such as cryptocurrencies, except here in my words exceptions such as extraordinary projects, but low visibility which affects their future value.
We have as an example some of these cryptocurrencies, which are suspicious creations or almost without purpose:
- Brasil Samba Token $BST
- Moeda Seed $MDA
- Bitblocks $BBK
- B2U Coin $B2U
- Moss $MCO2
These are the examples of projects whose some just launched their pre-sale and disappeared, others still promise optimistic updates for their community, while still receiving profits from investors. So can we say that maybe supposedly all these mentioned projects are frauds? Or they simply had the misfortune of a project failing? I strongly believe the first option. That is the current problem with digital assets in Brazil, a regularization might just help some parties to feel safe with their digital assets. This last quote reminded me of the brokers that also reside here, reducing in simple words: Most are fraudulent.
So what can I say about all this, this may not affect almost anything about the current situation of cryptocurrencies in the country, even with this regularization we will still have strong investment movement outside digital assets, such as stocks, real estate investment funds and government treasuries.
It has already been cogitated a possible creation of a supposedly stable token for the country, this can go totally wrong if it follows the same path as Venezuela, $PETRO, which has already been the subject of numerous news about alleged illegal activities with the asset, not exclusively to its users in the country, but also to its current government. I still believe in the old cryptocurrency concept of it being relatively anonymous in its transactions, it is not at random that I support and have some dollars in Monero $XMR and ZCash $ZEC, but there is always a downside to this, we can cite the strong use of Monero on the darknet, since Bitcoin is no longer considered so private, as everything in life this has its good and bad side. This whole idea of regularization may be a frustrating attempt to adopt digital assets, will we also have some big brokers just stopping operating in the country to avoid this regularization? Only time can tell.
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