Brazilian Сrypto Industry: Interest Is Growing, Regulation Is Stagnating
Brazil, or the Federative Republic of Brazil, is a Portuguese-speaking state in South America with a population of more than 200 mln people. It’s the fifth largest country in the world and the sixth in terms of population. The Brazilian economy ranks ninth in the world in terms of nominal GDP and seventh in purchasing power parity. The country is a member of the UN, G20, WTO, Mercosur and the Union of South American Nations, as well as one of the BRICS countries.
The Brazilian economy is rather diverse due to the high level of development of the agriculture, mining and manufacturing industries and services. The country produces a variety of products: from automobiles, steel to computers, airplanes and consumer goods. Business structures are actively investing in equipment and technology, most of which is purchased from North American partners. At the same time, corruption, poverty and illiteracy are quite common, and they are the significant barriers to development.
Here are some facts about the Brazilian economy:
- The country has the most developed industrial sector in Latin America.
- Approximate percentage of GDP: agriculture — 5.5%; industry —27.5%; services — 67.0%.
- Most of the country's energy comes from renewable sources. The country is the largest producer of ethanol, sugar cane fuels and by this reason it is sometimes called the ‘bioenergy state’.
Computer and information services are currently leading in the export of services in Brazil, as the country is rapidly developing the IT sector and in 2017 it was the fifth largest market for information and communication technologies in the world. More than 1.5 mln people are involved in this area, and there are more than 40 major technology centers in the country.
The situation with the cryptocurrency industry in Brazil
Despite the enthusiasm of investors, regulators are still not active. They were proactive in November 2018 for the last time, submitting a draft bill on taxation of crypto assets. At the moment, there are no specific laws regarding the taxation of cryptocurrencies and digital assets. The only thing that exists is the income tax, and if you earn fiat while trading, you will be taxed, but if you just have cryptocurrency, you don't pay anything on taxes. However, some investors are accountable to the tax service — there is a provision that imposes a 15% tax on income for earnings of more than 35,000 reals per month (approximately 10,000 US dollars).
Attention to cryptocurrency as a reserve means of storing capital is not accidental: a surge in the volume of trading in digital assets may be caused by a fall in economic indicators since last February. With such a dubious "achievement", Brazil may well be considered a contender for primacy in the Bitcoin market in Latin America, by overtaking Argentina. It is possible that the government understands that clarity in the legislation regarding cryptocurrencies and tokensales will significantly improve the investment atmosphere in the country, but today the crypto industry is moved forward by some single enthusiasts, who oppose lots of barriers on their way.
Image courtesy of Coindoo
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