Brazilian legislators are about to debate a tax reform of controversial cryptocurrencies proposed by President Luiz Inácio Lula Da Silva, who has aroused strong criticism from industry stakeholders. The provisional measure, promulgated in June, eliminates the exemptions from cryptographic trading on a small scale and requires a stable tax of 17.5% on all transactions, a significant change compared to the previous threshold of 35,000 reais ($ 6,320). The measurement must be approved by October 8 to remain valid, an audience of the congress scheduled for August 6. Critics argue that policy could remove innovation and stimulate cryptographic activity underground, while supporters underline the need to close the perceived tax gaps (1).
Meanwhile, a renewed survey on the balanced token, now disappeared from Argentina, revealed new details on its launch. Transactions linked to Hayden Davis, a key figure in the project and CEO of Kelier Ventures, revealed a transfer of $ 500,000 to Kraken, an exchange with Know-Your-Customer (KYC) data. The time of the transaction coincided with a meeting between Davis, the co-founder of the Balance Mauricio November and President Javier Milei on January 30, during which they discussed blockchain technology. The probe, which examines regulatory oversights when the 2021 balance collapse, highlights the complexities of the balance between technological innovation and compliance (1).
The two developments highlight the growing tensions between regulators and the cryptographic sector. The Brazil’s tax proposal reflects similar debates in Europe and Asia, where governments attack the taxation of decentralized assets without stifling growth. Industry defenders warn that a rigid framework could alienate retail investors and hinders the emerging digital economy of Brazil. “This is a frank approach that ignores the unique nature of cryptocurrencies,” noted an analyst, citing the challenges spent on other markets (1).
The case of the balance, on the other hand, serves as an edifying tale for the Big Tech foray into finance. Newly disclosed communications between Facebook executives and financial institutions Reveal the regulatory obstacles of the project, which finally led to its abandonment. The regulators are now confronted with the challenge of developing executives who deal with risks without stifling the transfective innovation of digital currency, in particular as central banks advance their own digital initiatives (1).
While the Brazil congress is preparing to vote, the result could create a precedent for cryptographic taxation on emerging markets. Defenders urge decision makers to refine the measure by dialogue, highlighting the need for a balanced approach that promotes innovation while responding to tax concerns. “A unique approach will not work here,” said a representative of a cryptography defense group. “We need a framework that encourages innovation while responding to legitimate tax concerns” (1).
Sources:
(1) (Latam Insights: Brazil to debate the controversial cryptography tax; the balance probe stretches the new revelations) (https: // news.bitcoin.com / latam-insights-brazil-to-tobate-controlle-crypto-tax-libra-probe-snaks /))
