The bill still requires the approval of the executive branch before it becomes law.

Brazil’s Chamber of Deputies approved a bill on Tuesday regulating the crypto industry.

The bill, which was approved by the Senate in April and had been stuck in the Chamber of Deputies, now requires the approval of the executive branch to become law.

The bill, authored by deputy Aureo Ribeiro, establishes a new crime of fraud involving virtual assets, with a penalty of between two and six years plus a fine. It also stipulates the creation of a “virtual service provider” license, which is to be requested by companies, including exchanges and other crypto firms.

According to the text, companies will have 180 days to adapt to the new rules before the law will be enforced.

The text stipulates that crypto assets considered securities will be regulated by the Brazilian Securities and Exchange Commission (CVM), while other digital assets not falling into that category will fall under the responsibility of another body to be appointed by the executive branch. The Central Bank is expected to be chosen.

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The Banco Central do Brasil chose seven other projects as part of the Financial and Technological Innovation and Technology Laboratory.

Itaú Unibanco has been chosen by Brazil’s central bank to work on a decentralized finance (DeFi) liquidity pool.
The move comes as part of the government’s Financial and Technological Innovation and Technology Laboratory (LIFT), a public program that seeks to strengthen financial inclusion.

The platform – using blockchain and smart contracts – will allow the custody and exchange of tokens, such as stablecoins tied to the real, U.S. dollar or other fiat currencies, the central bank said in a statement released Friday.

In July, Itaú announced that it plans to launch an asset tokenization platform that transforms traditional finance products into tokens and also offers crypto custody services for its customers.

Seven other projects were announced by the Banco Central do Brasil, among them Easy Hash, which seeks to tokenize financial assets on the blockchain to decentralize credit risk among several creditors.

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Ripple is teaming up with the digital bank Travelex to introduce the product, which will initially allow transactions between Brazil and Mexico.

Ripple has introduced its crypto on-demand liquidity (ODL) service in Brazil in partnership with Travelex Bank, it announced Thursday.

Ripple’s ODL uses XRP to accelerate the transfer and exchange of fiat currencies between countries.

Travelex is the first bank in Latin America to use ODL, Ripple said, adding that the bank was also the first one registered and approved by the Brazilian Central Bank to operate in foreign exchange.

“Brazil is a key market for Ripple given its importance as an anchor to business in Latin America, its openness to crypto and country-wide initiatives that promote fintech innovation,” CEO Ripple, Brad Garlinghouse, said in a statement.

For now, Travelex will use ODL for payments between Brazil and Mexico, Travelex Bank COO João Manuel Campanelli told CoinDesk, adding that the company is working to extend that service to the United States and Asia.

Other Brazilian companies such as Banco Rendimento, Remessa Online, Frente Corretora, Banco Topazio and B&T Câmbio already use RippleNet, a cross-border payments system, said Ripple, which opened an office in Brazil in 2019.

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Deputies were originally scheduled to consider the text this week, which has already been approved by the Senate.

The Brazilian Chamber of Deputies postponed voting on a crypto bill until after the presidential elections in October, sources close to the matter told CoinDesk.

Deputies were going to consider the crypto bill before the congressional recess, starting next week, but the treatment of a budget guidelines law and a proposed constitutional reform for the medical sector have dominated the legislative agenda.

In April, the Senate approved the bill, which regulates crypto transactions and creates the label “virtual service providers” for crypto companies.

The Chamber of Deputies, for its part, has not reached a consensus on a final text as Congressman Expedito Netto (PSD-RO), in charge of presenting the bill in the lower house, removed two articles from the Senate’s original bill. The first removed article required exchanges to keep their assets separate from those of customers, while the second demanded exchanges to already have an EIN in Brazil in order to apply for a license.

ABCripto, the association that gathers local exchanges, asked the Chamber of Deputies to preserve those two original articles; meanwhile, foreign companies such as Binance and Bitso welcomed Netto’s proposed changes.

The first round of Brazil’s presidential elections will take place Oct. 2, in which former president Lula da Silva is the frontrunner, according to the latest polls. A run-off would take place on October 30.

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The bill will be voted on by the Chamber of Deputies and, if approved, can be vetoed by the executive branch.

The Brazilian Senate plenary approved Tuesday night a bill regulating crypto transactions.

The bill, introduced by Senator Flávio Arns, moves next to the Brazilian Chamber of Deputies, which will vote on the bill. If approved, the executive branch then has the power to veto it.

The text creates the label “virtual service providers” for crypto companies, which will be subject to the same responsibilities as other financial institutions for crimes against the Brazilian financial system.

If approved, the bill will prevent the Brazilian Securities and Exchange Commission from overseeing the crypto market, except for initial coin offerings (ICO). In counterpart, it determines that the Brazilian executive branch will designate an agency to supervise the crypto sector.

The Brazilian Senate’s economic affairs committee had approved Arns’ bill in February, shelving two other crypto bills presented by senators Styvenson Valentim and Soraya Thronicke.

The bill also creates a new crime carried out with virtual assets, punishable by a penalty of between two and six years in prison. The original text proposed a penalty of between four and eight years, but it was reduced after a request made by the Senate President, Rodrigo Pacheco.

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