Latam Insights: Brazilian Lawmaker Proposes Bill to Allow Investment Funds to Buy Crypto

Brazilian investment funds may soon gain regulatory approval to buy cryptocurrencies, thanks to a new draft bill introduced by São Paulo MP Adriana Ventura.

A Brazilian lawmaker has introduced a bill that would allow investment funds to purchase cryptocurrencies. The bill, which was published on the Brazilian parliament’s website, aims to meet growing demand from investment funds interested in crypto while ensuring a regulated and safe environment.

Brazilian Lawmaker Introduces Bill to Allow Investment Funds to Buy Crypto

Brazilian investment funds may soon gain regulatory approval to buy cryptocurrencies, thanks to a new draft bill introduced by São Paulo MP Adriana Ventura.

The bill aims to permit investment funds registered in Brazil to acquire crypto from licensed firms operating within the country. This move would align Brazil with the global trend of adopting cryptocurrencies and would recognize their importance as a legitimate asset class.

Currently, Brazilian institutional investors are restricted from direct crypto investments, despite the country having one of the largest retail crypto markets in Latin America.

“Letting investment funds include cryptocurrencies in their portfolios would align Brazil with the global trend of adopting these digital assets. It would recognize their importance as a legitimate asset class and it would reinforce the competitiveness of the domestic market.”

The proposed legislation would permit funds registered in Brazil to acquire crypto from licensed firms operating within the country. However, the bill would also require these funds to follow strict diversification rules, ensuring that no single crypto asset could exceed 5% of the fund’s net asset value.

The bill is now set to be analyzed by the Brazilian parliament, where it will face a vote before moving on to the next stage of the legislative process. If approved, the bill would significantly expand the Möglichkeiten for institutional crypto investments in Brazil.

Cryptocurrencies have been gaining popularity in Brazil over the past few years, with several major exchanges setting up shop in the country. The Brazilian government has also been relatively progressive in its approach to crypto regulation, compared to other countries in the region.

Earlier this year, the Brazilian Securities and Exchange Commission (CVM) announced that it would be creating a regulatory framework for cryptocurrencies. The framework is expected to be finalized by the end of 2023 and will provide guidance on how cryptocurrencies can be traded, custody, and used by financial institutions.