Brazilian Regulator: Cryptocurrency is Not a Financial Asset

Brazilian investment funds are now effectively prohibited from buying cryptocurrency.

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The Securities and Exchange Commission of Brazil (CVM) announced on Friday that digital currency cannot be considered a financial asset, and direct investment is thus not allowed. A fund looking to invest via foreign funds "should await further clarification", according to Reuters.

This follows a warning against investing in Bitcoin which the CVM issued along with the central bank back in December. Previously, central bank President Ilan Goldfajn had said: "The bitcoin is a financial asset with no ballast that people buy because they believe it will appreciate. That is a typical bubble or pyramid...The central bank is not interested in bubbles or illicit Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term."

A commission was set up by the government in May 2017 to discuss regulation of cryptocurrency in the country, and seven public hearings were held since then, during which experts spoke to politicians on the subject. The last was held in December, and the final decision made by Federal Deputy Expedito Netto was not positive: "We have decided to position ourselves by the prohibition of issuance in national territory, as well as to prevent its commercialization, intermediation and even acceptance as a means of payments for settlement of obligations in the Country."

Writing in Valuewalk, Brazilian author and Youtube star Raphaël Lima laments: "Brazil needs Bitcoin...According to a study by Credit Suisse, Brazil’s productivity has not risen since 1981, and it’s not going to rise if the government keeps banning everything that can make us more productive."

Brazil is a big market for Bitcoin, with some reporting that it is the fourth largest market by volume (infomoney.com.br).

Two Brazilians (one government adviser and one Ethereum programmer) have proposed an idea to integrate Ethereum into the country's legislative process, according to Quartz. In a country with 26 political parties in congress and 145 million voters, collecting and validating signatures for petitions can be a challenging process. An application designed on the Ethereum Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term aims to streamline this process, and thus make it more likely that petitions will be heard in parliament.