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R3 to Support a Startup-Focused Stock Exchange in Brazil

Enterprise blockchain tech firm R3 partnered with Brazilian digital bank Banco Maré to launch a stock exchange listing shares of startups.

Blockchain consortium R3 has partnered with Brazilian fintech company Banco Maré to launch a stock exchange for investing in technology firms.

Banco Maré, a blockchain-powered digital bank focused on financial inclusion, intends to build a tokenized stock exchange offering investments in technology companies with “social impact,” Cointelegraph Brazil reports July 16.

The new R3 technology-backed platform, provisionally named BVM12, will purportedly open a new funding source for technology startups, as well as enable individual investors to generate dividends from investments in new technologies, the report notes.

Rio de Janeiro-based Banco Maré has reportedly conducted its first informal consultations with the Brazilian Securities and Exchange Commission, and is reportedly planning to make an official request to the agency in August 2019.

Banco Maré CEO Alexander Albuquerque claimed that the new venture aims to democratize risky investment and bring the low-income public to the stock market.

Earlier in June, Cointelegraph reported that the Brazilian government was considering a bill requiring all units of local public administrations to promote new technologies such as blockchain. Recently, the Brazilian diplomatic academy, the Rio Branco Institute, was reported to start requiring candidates to have knowledge of cryptocurrencies and blockchain.

On July 12, the Brazilian state of Bahia launched a blockchain-based app to track the process of public bidding on government contracts.

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Brazil: Member of Former Royal Family Speaks Out Against Crypto Regulation

A federal deputy and member of the former royal family of Brazil spoke out against proposed crypto regulation in the National Congress.

Luiz Philippe de Orleans-Braganza, a descendant of the former royal family of Brazil, has spoken out against cryptocurrency regulation in the country, Cointelegraph Brazil reported on July 15.

Orleans-Braganza, who is also a federal deputy in the Brazilian National Congress, spoke out during a special commission meeting wherein lawmakers discussed a bill that proposes a legal framework for digital currencies. 

Orleans-Braganza said the bill should only be discussed in the Congress if there is high consumer demand for it. Otherwise, according to Orleans-Braganza, it is merely an example of the state intervening in something which is not its business:

“Good regulation is one that comes from the consumer’s demand for something for which he felt injured and calls for state protection. I question this adventure of wanting to regulate something which consumers and companies organized to receive Bitcoin do not demand.”

Orleans-Braganza further noted that cryptocurrencies may sometimes be used under illicit circumstances, but that does not justify limitless regulation by the state.

The President of the Chamber of Deputies, Rodrigo Maia, requested the creation of the aforementioned special commission to deliver an opinion on the bill, which aims to regulate Bitcoin (BTC) and other digital currencies in Brazil, on May 30, 2019. The commission is composed of 34 members in accordance with the House Rules of Procedure.

In June, the Department of Federal Revenue of Brazil released new rules requiring that cryptocurrency exchanges inform the regulator about users’ transactions in order to identify tax fraud. The agency now requires that cryptocurrency exchanges operators based in Brazil provide information about all transactions carried out within their system.

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Brazilian State Launches Blockchain Platform for Government Contract Bids

The Brazilian state of Bahia announced an agriculturally-focused blockchain app, designed to make bidding for government contracts transparent.

In Brazil, the state of Bahia has launched a blockchain application to track the process of public bidding on government contracts, according to a report by Cointelegraph Brazil on July 12.

The blockchain-based solution, called Online Bid Solution (SOL) was reportedly developed by Cayenne Technology and Design. Bids will reportedly be completely transparent and secure due with the application of blockchain tech.

According to Bahia government, the intended beneficiaries of SOL appear to be the Brazilian agriculture industry. The solution is designed to help connect agriculture organizations in Bahia with suppliers and workers throughout Brazil, as well as provide transparency on the contract bidding process.The state of Bahia said that there are over 1,000 organizations projected to use SOL:

“The application, already available in the Play Store and the Apple Store, will be used by about 1,100 agricultural associations and cooperatives in the states of Bahia and Rio Grande do Norte, under the Bahia Productive and Governo Cidadão, financed through a loan agreement between the state governments and the World Bank.”

As previously reported by Cointelegraph, the Brazilian coffee farming cooperative Minasul announced plans to issue a blockchain token for coffee farmers. Farmers will reportedly be able to earn tokens as a reward for harvesting coffee beans, and use the proceeds to purchase a variety of goods. This is purportedly a useful economic system for the farmers, since this method of financing does not require registration in a notary’s office.

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Brazilian Coffee Farming Cooperative to Issue a Coffee-Backed Token

Brazilian coffee farming cooperative Minasul plans to issue a coffee-backed token.

Brazilian coffee farming cooperative Minasul plans to issue a coffee-backed token, Bloomberg reported on July 11.

According to Bloomberg, Minasul’s president Jose Marcos Magalhaes declared at the Global Coffee Forum in Campinas that Minasul intends to launch the token this month. Farmers will reportedly be able to use the coin to buy fertilizer, machinery and other non-farm products — including cars and food — in a digital marketplace.

Per the report, farmers will also be able to acquire the token in exchange for current and future coffee beans production: 30% of the current harvest, 20% of the next crop, and 10% of the following season are eligible for exchange. Magalhaes allegedly explained that such a financing mechanism will reduce operating costs for both the cooperative and the farmers, since it won’t require registration through a notary’s office.

The project is part of a broader digitization effort by the Minasul cooperative, which is also looking to allow farmers to sell their harvest directly from their smartphones. Lastly, Bloomberg claims that Minasul, based in the state of Minas Gerais, is one of Brazil’s largest arabica-coffee cooperatives, Brazil being the world’s single largest coffee exporter.

As Cointelegraph reported in June, Microsoft has registered a suite of applications in Brazil that are designed to improve efficiency in the agriculture sector.

Earlier this month, Decentralized insuretech firm Etherisc launched a blockchain-based insurance platform for farmers in Sri Lanka.

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Brazil Requires New Diplomats to Know About Blockchain and Crypto

Brazil’s diplomatic academy, the Rio Branco Institute, will now require that candidates have knowledge of cryptocurrencies and blockchain.

The Brazilian diplomatic academy, the Rio Branco Institute, will now require that candidates have knowledge of cryptocurrencies and blockchain, Cointelegraph Brazil reported on July 8.

The Rio Branco Institute — established in 1945 and offering two advancement courses for diplomats — has published the 2019 edict for the selection of new diplomats in Brazil where it included the requirement that candidates know about blockchain and digital currencies.

As the publication highlights, the subject is mandatory for the test that is initially delivered in two phases, wherein knowledge about blockchain and cryptocurrencies is mandatory in both phases. The notice states that the educational establishment will offer 20 new places and that the starting salary will be 19,199.06 reals ($5,045).

In June, major government and financial authorities in Brazil teamed up to develop a regulatory sandbox model targeting new technologies such as blockchain in order to adapt to the digital transformation affecting the financial, capital and insurance sectors in Brazil.

That same month, Cointelegraph reported that the Brazilian government will consider a draft bill that requires all units of local public administrations to promote new technologies, including blockchain.

If approved, the draft bill will ostensibly require both federal and state government divisions to apply emerging technologies such as artificial intelligence and blockchain in order to improve public services.

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Brazilian Exchanges to Integrate the Real-T, a Stablecoin Pegged to the Real

Cryptocurrency exchanges in Brazil will purportedly be among the first platforms to offer a stablecoin pegged one-to-one with the Brazilian real.

Brazilian cryptocurrency exchanges are rolling out support for a stablecoin, according to a report by Cointelegraph Brasil on June 26.

Brazilian platforms including PagCripto, Nox Trading, 3xBit, and Bitcambio, are reportedly slated to be the next adopters to issue this new stablecoin — pegged one-to-one with the Brazilian real —  Real-T (REALT).

As explained in its whitepaper, the “Real-T Token” is an Ethereum-based ERC-20 stablecoin that is “strictly pegged” to BRL. The paper claims that the company behind the token, Real-T Tecnologia S.A., will publicly share its bank statement to provide evidence for full backing of Real-T in fiat money.

The paper also notes that most stablecoins are currently pegged to the U.S. dollar — including Tether (USDT), Gemini Dollar (GUSD), and USD Coin (USDC) — whereas the Real-T would purportedly be the first stablecoin for the real.

REALT was original launched on the exchange CBX on May 10. According to this announcement, REALT is available for deposit and withdraw, as well as for trade with USDT.

As previously reported by Cointelegraph, the Department of Federal Revenue of Brazil (RFB) has announced new regulatory policies for crypto exchanges, which are to be implemented in September. 

Exchanges are now reportedly required to inform the RFB on user transactions in order to guard against tax fraud. The RFB also specified that exchanges based outside of Brazil must disclose transaction data when its monthly value surpasses $7,750.

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Future for State-Backed Brazilian Token Issuance Unclear as Bank Sees Leadership Reshuffle

Turmoil over the leadership of the Brazilian Development Bank may pose challenges to cryptocurrency trials.

On June 18, Brazil’s National Bank for Economic and Social Development (BNDES) announced the election of Finance Director José Flavio Ferreira Ramos as its interim president. 

Ramos will serve as the BNDES head until the inauguration of 38-year-old Gustavo Henrique Moreira Montezano, a former economist and the current deputy secretary of privatization and disinvestment. 

Montezano’s appointment followed two meetings on June 17 between Brazilian President Jair Bolsonaro and the country’s minister of the economy and former economic advisor to Bolsonaro’s presidential campaign, Paulo Guedes. The meetings were held in response to the sudden departure of the bank’s now-former president, Joaquim Levy. 

Levy submitted his letter of resignation on June 16 amid perceived tension between himself and President Bolsonaro. 

Montezano closely tied to Bolsonaro government

Montezano embarked on a 17-year career in the finance industry prior to joining the Ministry of Economy. He is a former partner of BTG Pactual and the former chief operating officer at Engelhart Commodities Trading Partners.

Montezano is the son of the economist Roberto Montezano, who worked as a professor at the Instituto Brasileiro de Mercado de Capitais (IBMEC) for more than 30 years. Notably, during his tenure at IBMEC, Roberto Montezano had worked alongside Guedes.

Moreira Montezano has also known both President Bolsnaro and his family personally since childhood, having grown up in the same condominium as the president in Tijuca, Rio.

Tension between Levy and Bolsonaro

Levy’s resignation was prompted by Bolsonaro’s anger with the former president’s appointment of Marcos Barbosa Pinto to the position of director of BNDES Capital Markets — an entity that is responsible for managing a portfolio valued at more than 100 billion Brazilian real (roughly $26 billion). 

Both Levy and Pinto had worked for the BNDES during the governments of Brazil’s former ruling party, the Workers’ Party (PT), which drew ire from the president. Pinto previously served as the chief of staff to Demian Fiocca during Luiz Inácio Lula da Silva’s government, while Levy served as finance minister during the second term of Dilma Rousseff’s presidency.

Brazilian media reported that Bolsonaro stated, “I’m already here with Levy. I told him, ‘Quit this guy on Monday or I’ll fire you without going through Paulo Guedes,’” adding that “suspicious people” could not hold office in his administration. Barbosa Pinto also delivered his letter of resignation on June 16. 

Upon resignation, Levy offered praise to his former BNDES colleagues, commending those “who have collaborated with energy and seriousness to transform the bank, allowing it to respond fully to the new challenges of financing development, meeting the many needs of our population and confirming their vocation and long tradition of excellence and responsibility.” Levy added his thanks to Guedes for his “invitation to serve the country” and wished him “success” in the government’s reforms.

The sudden resignations drew the criticism of the president of the Chamber of Deputies of Brazil, Rodrigo Maia. Maia described the government as coming to comprise a “crisis plant,” adding:

“This lawyer who was dismissed from the BNDES is one of the most understood cadres of social policy in Brazil. It is a shame that Brazil lost two quality paintings of Joaquim Levy and Marcos Pinto in the way they were removed.”

BNDES to finance documentary using crypto

On June 3, Brazilian publication State of Sao Paulo reported that film producer Elo Company had participated in a proof of concept for the BNDESToken initiative. Elo Company is known for its involvement in the production of Alê Abreu’s Oscar-nominated “Boy and the World.”

BNDESToken is slated to comprise an ether-based stablecoin backed by the Brazilian real that the BNDES plans to use to finance the production of a documentary produced alongside Elo Company. 

The project will see the development bank issue the tokens to fund purchases necessitated by the film, with the BNDES also facilitating the exchange of said tokens for fiat currency. The token will not be promoted and can only be issued or exchanged by the bank. The BNDES has been developing its cryptocurrency since 2018. Gladstone Arantes Jr., an IT manager who is working on the token’s development, recently stated:

“Instead of releasing the money to the client, the proposal is that we will release the token that can be used for all purchases provided for in the financing agreement.”

Vanessa da Rocha Santos Almeida, another developer working on BNDESToken, has described the project as allowing “society to look at the transactions” made by the national development bank.

BNDES trials token issuance

The proof of concept saw Elo Company simulate the payment of four screenwriters, with Brazil’s National Cinema Agency (ANCINE) also participating in the project. 

Sabrina Nudeliman, the president of Elo Company, stated that “when the accounts are questioned and more transparency is requested, the blockchain responds to this demand.” Nudeliman added, “With the blockchain platform, my vendor provides real-time accountability.” 

Daniel Tonacci, an adviser to the board of ANCINE, also emphasized the efficiency savings made possible through the adoption of distributed ledger technology, stating:

“It’s the Waze of public money, where we can track where it goes, where it fits, how fast it is.”

Brazilian institutions explore blockchain

On May 30, BNDES systems analyst Fabiano Mattos published an opinion piece praising the BNDES’ adoption of distributed ledger technology (DLT). Matto emphasized the security and transparency benefits of digital currencies, asserting that “blockchain would be the ideal solution to support BNDES disbursement.” He continued:

 “This system would allow the whole operational track to be followed — including the financial details — from disbursement of the financing, to the client’s suppliers and other counterparties. Finally, those suppliers could exchange the token for fiat currency at BNDES. It is thus publicly and irrefutably possible for a citizen, and society as a whole, to monitor the disbursements of public money made by the BNDES — and also to see the impact of this action on the various actors of the Brazilian economy. BNDESToken would vastly improve the way we can measure effectiveness of BNDES funding.”

Mattos also noted that a number of Brazilian institutions are actively collaborating to explore potential applications for DLT, including the Institute of Technology and Society and the Government Blockchain Association. The BNDES analyst indicated that the management of land registries, intellectual property rights and centralized identity are among the governance processes for which blockchain technology is being explored.

Brazil reconsiders regulations

The increasing penetration of cryptocurrency into Brazilian society has prompted moves to develop a clear regulatory apparatus governing the country’s crypto sectors.

On May 30, Maia requested that a special commission be created to consider the current legislative framework pertaining to digital currencies in Brazil. Several weeks beforehand, the Brazilian Internal Revenue Service also published new tax guidance mandating that cryptocurrency transactions valued in excess of BRL$30,000 (approximately $7,600) be reported each month.

In March, the BNDES chose five blockchain startups to participate in its BNDES Garagem incubator program alongside 74 other emerging companies.

Related: As Brazil’s Economy Risks Recession, Regulators and Banks Implement Blockchain

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A Religious Leader of One of The Largest Christian Cults in Latin America is Linked to a Possible Crypto Ponzi Scheme

Bitcoin has already crossed paths with religion, and this is not good news. The Universal Church of the Kingdom of God (IURD by its Spanish acronym or UCKG in english) has been linked with AirBit Global, an organization that has been labeled as a Crypto Ponzi scheme upon which there are several complaints.

According to an extensive report published by the Brazilian portal The Intercept, the founder of AirBit Club Brasil (the Brazilian branch of AirBit Global) is linked to the Universal Church of the Kingdom of God and used his influence among the faithful to promote his project for several years.

A Story That Brings Together Religion, Economics and Law

The Universal Church of the Kingdom of God was founded in 1977 by Edir Macedo, a former lottery cashier from the state of Rio de Janeiro. After almost 3 decades, the Church was so successful that today it is one of the largest Pentecostal cults in Latin America and Macedo’s fortune amounted to 1.1 Bn USD according to Forbes.

The Universal Church of the Kingdom of God (UCKG) is no stranger to controversy. Despite its rapid growth and the commitment of its members, this religious organization has been involved in many scandals, both legal and religious.

Due to its practices, the Church was expelled from the Portuguese Evangelical Alliance in 1992, a decision similar to the one taken by its homologue Peruvian organization. However, in Belgium, the Chamber of Representatives cataloged this organization as a Cult commenting that “(The UCKG) is apparently a truly criminal association, whose only purpose is enrichment”. After a strong controversy, the legislative body revised its wording. Likewise, in 2014 the church was sanctioned in Madagascar for being considered a cult without permission to operate as an actual church.

Crypto Meets God

The research revealed that Gabriel Fonseca Reis, founder of AirBit Club Brasil, put himself among the members of the congregation as an example of success and prosperity thanks to crypto trading. This image was strongly promoted in different events of the church such as interviews, congresses, and public activities.

Fonseca Reis has leadership roles within the Church, even traveling around the world spreading the church’s message and “saving souls” as he said. In an article published on the official UCKG’s website, they portray a Fonseca who went from poor to rich. “Something that helped me a lot was that I already took part in the corporate meetings at Universal (Church of the Kingdom of God), which were broadening my vision and helping me not to be afraid of failure. I realized that the same faith that healed me could also be used to prosper” says Fonseca as a prelude to an invitation to the Church’s Congress for Success.

Screenshot of the Church's official Website. On it, Fonseca appears with the AirBit Club Website shown on the back. AirBit is being investigated after several accusations of being a crypto scam
Screenshot of the Church’s official Website. On it, Fonseca appears with the AirBit Club Website shown on the back

Fonseca has promoted AirBit in many countries, including Brazil, Portugal, Switzerland, Mexico, mentioning that Bitcoin (BTC) has been nominated for the Nobel Prize in Economics, both in 2015 and 2016 (yes… for real). Also, he promises daily profits to those investing.

AirBit has been cataloged as a dangerous business. In Colombia, the Superintendence of Finance issued a Communication explaining that although crypto trading is not regulated by the country, “what could be considered an illegal fundraising activity is the promotion of this business under pyramid schemes where returns are guaranteed for the fact of investing in cryptocurrencies with the commitment to link more people who also link to others who bring contributions that are ultimately the only source of payment of the benefits that the platform or the person promises”.

Scam Bitcoin labeled AirBit as “a viral pyramid and Ponzi scheme hybrid.” Also, the Brazilian website “Reclame aquí” has 31 complains against AirBit.

Other experiences don’t seem to be very pleasant either: “Yes, I am invested in Airbit Club,” a user told to CrDaily “The only way you can make money is by recruiting and screwing over other unsuspecting souls.”

On its main page, the organizers explain that AirBit is a “Blockchain Distributed Technology and Affiliate program, which is based on an algorithm that distributes fair referral commissions to all members.” They currently have over 2.5 million affiliates, according to company data.

The platform offers memberships that range from $1,000 to $7,000 for the initial packages (then there are other membership levels which do not show the amount of money required to be purchased). They offer profits for non-specific investments, and for attracting new members to the scheme. Likewise, it has not been possible to find any registration data of this organization or any legal representative at least.

The high price of these "packs" and the exceptionally high promised ROI is a sign of a possible crypto scam
Some of the “Memberships” offered by AirBit Club

At first sight, AirBit could raise several of the “red flags” described by the SEC in a guide to identify crypto – related Ponzi Schemes: It offers consistently high returns, has no license, relies on affiliates and referrals, is not registered nor licensed, does not provide clear information on trading strategies and does not require more qualification to invest than the fact of having money.

This Modus operandi resembles that of the infamous OneCoin, a project that offers memberships and educational packages with prices ranging from 100 to over 55K Euros – which is currently being investigated for causing nearly 4 Billion dollars in damages to investors.

Some of the offers from OneCoin. A crypto related project which is being investigated for scam allegations
Screenshot of OneCoin’s website

Gabriel Fonseca Reis entered the world of MLM at the age of 17 with Multiclick Brasil. There he shared his skills in a promotional video explaining how he purchased a BMW after four months of being involved in the business.

When Multiclick Brasil was blocked by the Public Prosecutor’s Office of Santa Catarina for being a pyramid scheme that defrauded more than 300,000 people, Fonseca migrated to AirBit.

Are Religious People Easy to Manipulate?

Many times, religious cults, Ponzi schemes and MLM programs resort to similar tactics. Leaving aside the discussion of whether the intentions are legitimate or not, the basic strategy aims to generate an extreme, almost tribal empathy that leads the members of the organization to trust blindly in the proposals and ideas shared by their leaders.

 Marshall Applewhite, founder of Heaven’s Gate conviced 39 followers to commit suicide in 1997

According to the Humanist Association of Toronto “sometimes it’s important to note that religion; less an intellectual, moral guide … is merely a class-based tribal identity, useful for selling insurance, finding a business partner (etc)”. This perspective is worrying, especially when, beyond the use of crypto, other fraudsters have taken advantage of the ingenuity of religious believers to trick them.

“The underlying issue, I think, is the question of mutual trust,” Nancy Ammerman, a Boston University professor of religion and sociology said to Christian Century. “These schemes rely on and exploit that trust, and people within religious communities tend to have high levels of trust for others within their community.”

The Intercept attempted to contact the people under investigation. The Church denied any participation in the scheme, asserting that Gabriel Fonseca Reis is just another member of its congregation. Both AirBitClub and the UCKG refused speaking with Ethereum World News.

The best decision you could make before investing in crypto is to educate yourself and have a healthy dose of objectivity and common sense. When something is too good to be true, it usually is questionable; and only God will be able to help you if you are involved in a scam by the time it comes out.

The post A Religious Leader of One of The Largest Christian Cults in Latin America is Linked to a Possible Crypto Ponzi Scheme appeared first on Ethereum World News.

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As Brazil’s Economy Risks Recession, Regulators and Banks Implement Blockchain

The Brazilian government has made several moves surrounding blockchain and its regulation in the past two weeks.

Brazil’s weak economic growth and inflationary pressure have led to more than 13 million Brazilians currently out of work. The unemployment rate currently stands at 12.5%. While the country runs the risk of recession, cryptocurrency’s low barrier for entry and promise of large returns appeal to Brazilians. Bruno Peroni, chief sales officer at Atlas Quantum, told Cointelegraph:

“We have a higher number of people investing in crypto than on the local stocks markets. The most recent estimates show that there are 1.5 million Brazilians investing in crypto, whereas the local stock markets, called B3, has just reached 1 million investors.”

Authorities explore blockchain, regulation

Timeline of Recent Developments in Brazil

A draft bill requiring public administrators to promote blockchain, as Cointelegraph Brazil reported, was filed by a group of 10 federal officials from different political parties and states in the lower house of the National Congress of Brazil on June 11.

The new draft bill, titled the Digital Provision of Public Services in Public Administration – Digital Government, requires federal and state government divisions to explore technologies like artificial intelligence and blockchain to improve public services.

Federal Deputy Tiago Mitraud of the libertarian Brazilian political party called the New Party signed the bill, as well as officials from various other parties, including the Brazilian Socialist Party (PSB). It’s not the only recent action by Brazilian authorities on the cryptocurrency and blockchain front.

The president of the Brazil’s Chamber of Deputies, furthermore, ordered a commission to consider cryptocurrency regulation for the country. The country is also establishing a regulatory sandbox, according to reports from June 13.

Also, within a space of just a week, Brazil’s Department of Federal Revenue published a manual on June 18 that obliges all exchanges in Brazil to report 100% of user transactions to the supervisory.

In January of this year, the Financial Supervision Council of Brazil announced it would regulate cryptocurrencies using Brazil’s Anti-Money Laundering laws, including fines as high as $5 million for violators.

Banks сlose down brokerage firms with cryptocurrency ties

Brazilian merchants, meanwhile, are still dealing with a lack of regulatory clarity. There has been an ongoing dispute between banks and companies operating in the cryptocurrency space.

Banks closed the accounts of various brokerage firms with cryptocurrency ties. Fernando Furlan, president of the Brazilian Blockchain and Cryptocurrency Association (ABCB), told Universo Online, a Brazilian news website:

“We are competitors and we are also users of the banking system, banks can not act unilaterally, they claim that it is not possible to guarantee that there is no money laundering.”

“While the government and the banks are always boasting about their projects involving blockchain technology, many crypto-related companies have their bank accounts closed,” he added.

Campos also adds that the focus of the crypto industry should shift in the near future, saying, “By following strict rules, we hope that the government understands that crypto is not a safe haven for criminals and that it should strive for Brazil to be a big player in this new era of decentralized finance.”

Regulators, banks and international blockchain consortiums developing the nation’s distributed ledger Infrastructure

While regulators explore cryptocurrency regulations, the Central Bank of Brazil (BCB), the Securities and Exchange Commission (CVM), the Superintendent of Private Insurance (SUSEP) and the Ministry of Economy’s Special Secretariat for Finance are working to digitize the financial, capital and insurance sectors of Brazil by integrating blockchain technology. The official statement said:

“The use of innovative technologies as distributed ledger technology, blockchain, robo-advisors and artificial intelligence has allowed the rise of new business models, reflecting a bigger offer and reach.”

Vice President of Brazil’s largest bank, Bradesco, revealed that major banks will introduce a unique blockchain platform, which it is developing alongside distributed ledger consortium R3, and the bank Itau. The platform is focused on foreign trade and insurance, as Cointelegraph reported on June 11. Bradesco told Cointelegraph in a written statement:

“Bradesco has been studying Blockchain/Distributed Ledger since 2015 and since then has carried out pilot projects in areas related to payments, Know Your Customer (KYC), fraud prevention and Certificate of Deposits (CDB). The platforms used so far are Corda, Hyperledger Fabric, Ethereum, and Ripple. Through these projects, we have tracked the evolution of technology regarding processing and reconciliation capacity for future large scale applications.”

The bank has also recently joined IBM’s Blockchain World Wire solution for international remittances, the Marco Polo trade finance consortium and the National Financial System Network, the first Brazilian blockchain network, which is managed by the Interbank Payment Chamber (CIP).

Bradesco believes that blockchain and distributed ledger technologies could help “in terms of agility, security, transaction transparency, and costs in existing services, as well as enabling the development of new services.”

Keiji Sakai, the country head for Brazil at R3, told Cointelegraph in an emailed statement:

“While we are very excited about these projects, the potential for Corda stretches well beyond financial services. Corda removes costly friction in business transactions across every industry. It enables institutions to transact directly using smart contracts, while ensuring the highest levels of privacy and security. Its applications stretch from financial services and healthcare to oil and gas and we’re always looking to capitalise on those opportunities in Brazil and beyond.”

In early June, CIP launched its blockchain ID platform on Hyperledger Fabric through a partnership with IBM. Nine banks are participating in the project, called Device ID, which is designed to authenticate and verify digital signatures with mobile devices. The project is to be integrated into Brazil’s domestic clearing system, the Brazilian Payment System (SPB). Regarding this, Joaquim Kiyoshi Kavakama, director of Febraban, Brazil’s national banking association, told Cointelegraph:

“Brazilian banks have been studying blockchain technology applications for a long time, but they weren’t all together. So we decided to create a group and unify all actions, which is very important to achieve standardization to all banks. We are now in the forefront when it comes to blockchain.”

In addition to the Device ID anti-fraud solution headed by CIP, Bradesco has projects related to international remittance, trade finance, insurance, investments, customer registration and payments, among others.

Ripple, an enterprise blockchain software company, recently opened an office in Brazil as a first step to expanding its footprint in South America. The company has already partnered with more than a dozen Brazilian financial institutions and money transfer companies — including Santander Brazil, international payment service BeeTech, Banco Rendimento, etc.

Ripple says its 2019 focus includes growing its presence in not only Brazil, but across South America, to countries like Chile, Peru and Argentina. The company is also working with Brazilian universities — such as the University of São Paulo and Fundação Getulio Vargas per its University Blockchain Research Initiative. Luiz Antonio Sacco, managing director for Ripple in South America, shared his thoughts with Cointelegraph:

“We believe that academic institutions will play a key role driving the blockchain industry forward. USPand FGV are innovative, forward-thinking institutions that are investing in blockchain research to explore new use cases and help prepare students for future jobs in this space.”

Peroni of Atlas Quantum says it’s hard to know the cause of Bitcoin’s growth in Brazil. “Our guess is that the low barrier to entrance and the prospect of exponential returns might be one of the reasons why so many Brazilian investors are gearing towards crypto,” he said.

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Brazil Requires Crypto Exchanges to Report on User Transactions to Authorities

Brazil’s federal revenue agency has released new rules requiring that crypto trading platforms report on all crypto transactions carried out within their system.

The Department of Federal Revenue of Brazil (RFB) has released new rules requiring that cryptocurrency exchanges inform the regulator about users’ transactions in order to identify tax fraud, Cointelegraph Brazil reported on June 19.

The guidelines clarify how cryptocurrency trading platforms in Brazil should adopt new rules to report about the movements of users’ crypto funds to the agency, and comply with the requirements of Normative Instruction 1.888/2019 published in May of this year.

Specifically, the agency requires that cryptocurrency exchanges operators based in Brazil provide information about all transactions carried out within their system, while those platforms based abroad must provide information “whenever the monthly value of the operations, alone or jointly, exceed 30,000.00 Brazilian reals [$7,750].”

Apart from the volume of a transaction, exchange operators must also provide data such as the nationality of the digital currency holder, their residence or domicile, registration number and the crypto assets used in a transaction.

Also according to the rules, all required information must be provided within a specified period, “until 23:59:59, Brasilia time, on the last calendar month subsequent to that in which the operation took place.” The new rules will come into force in September 2019.

When the RFB announced that it was forming the requirements for cryptocurrency exchanges, Ismair Junior Couto, legal director of the Bitcoin Banco Group — Brazil’s largest cryptocurrency broker — said the initiative had long been expected. He added that Bitcoin Banco had made provisions to provide the required information to authorities.

On May 31, Cointelegraph Brazil reported that the President of the Chamber of Deputies of Brazil ordered a commission to be created to consider cryptocurrency regulation in the country. The commission will be tasked with regulating local activities around Bitcoin (BTC) and other digital assets, and is reportedly expected to be composed of 34 members in accordance with the House Rules of Procedure.