DailyCoin
Published Feb 27, 2021 04:52AM ET
Bitcoin Regulation In Latin America
The use of digital currency is on the rise in Latin America, with many individuals and even governments resorting to Blockchain technology to ease transactions and improve transparency.
Despite growing popularity, the region’s governments are keen to regulate the currencies to prevent misuse of criminal elements. Brazil’s Federal Revenue Service (Receita Federal) requires residents to report transactions involving cryptocurrencies.
Current status of Bitcoin in Latin America
Bitcoin in Latin America is huge. Statistica, the world’s leading portal for statistics, noted that Latin America has the highest number of cryptocurrency users globally.
Countries like Brazil, Colombia, Argentina, Mexico, and Chile were all part of the top 10 countries with the highest number of Bitcoin users. The reason for their burgeoning use is not far-fetched, as a slew of financial tragedies has plagued the region.
For example, Venezuela suffered insane levels of inflation that have rendered its currency worthless. Argentina saw inflation levels reach 53.89% in 2019 and Brazil the highest inflation rates in 13 years.
Aside from being a hedge against inflation, Bitcoin’s popularity in the region is due to the transfer of funds’ speed and security. Migrants in America have been sending money to their families back home in Latin America using cryptocurrencies.
Several tech startups have stepped in to fill the void, such as Valiu that creates a platform allowing funds to be transferred to Venezuela within a short time. Similarly, La PlataForma enables users to move crypto-currencies to people within the region with relative ease.
On the Flipside
Bitcoin regulation In Latin America
To prevent Blockchain technology from being misused by criminal enterprises, government regulators have attempted to exercise a form of control over Bitcoin. For example, Brazil’s Federal Reserve Service (Receita Federal) now requires citizens to report all transactions involving cryptocurrencies. The Central Bank of Brazil accepts Bitcoins and other cryptocurrencies as an asset class.
For tax, cryptocurrencies are generally viewed as an asset class, and capital gain taxes are paid on them. In Argentina and Brazil, they may be categorized as income tax, depending on the volume.
Mexico’s Bill, “Law, To Regulate Financial Technology Companies,” requires companies to comply with anti-money laundering laws concerning Bitcoins and other crypto-currencies by registering and repeating them.
Apart from regulation, governments across the region are increasingly using blockchain tech and cryptos to improve accountability.
Colombia’s Attorney General’s Office now uses blockchain to improve transparency in awarding new contracts. Similarly, Ecopetrol – Colombia’s state-owned oil company announced that it is making blockchain investments to improve the supply of oil and gas networks.
Continue reading on DailyCoin
Written By: DailyCoin
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.