- The involved firms aim to grow the Brazilian crypto market to £76.19 by the end of 2020.
- The code was published on a private blockchain-based platform created by GrowthTech.
- According to the agreement, all crypto firms in the country will have to apply KYC policies.
Members of ABCripto, Brazil’s crypto economy association, have signed a code of self-regulation when it comes to the crypto market. A report unveiled this news on August 17, noting that the document aims to validate and boost the use of cryptocurrencies in Brazil. Renowned firms in the Brazilian crypto scene signed this document seeking to get commercialization. Reportedly, these firms aim to grow the Brazilian crypto market to £76.19 by year-end.
According to the report, the document stipulates that all firms involved in crypto exchange and brokerage will have to introduce new measures to avoid money laundering among other crimes on their platforms. The companies that signed the code include Foxbit, Ripio, Bitcoin Market, and Novadax. Combined, these four firms account for approximately 80% of the volume of crypto transactions in the country. Owing to this fact, ABCripto deems this agreement a significant feat in the Brazilian crypto ecosystem.
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Per the publication, the signing ceremony took place two weeks ago on a live broadcast. The firms then published the code on a GrowthTech-created private blockchain-based platform. The agreement’s goal is to introduce operational practices and compliance standards that all members should follow.
Brazil’s demand for crypto continues surging
Commenting on this milestone, Safari Felix, ABCripto’s executive director, and a cryptography expert said,
“In the last three years, the demand for crypts has grown by more than double digits a year in Brazil and worldwide. We punctured the bubble of that initial group of enthusiasts, and that makes it necessary to set performance standards.”
However, despite this outstanding growth, the Brazilian crypto space continues to face a regulatory vacuum. This is because Brazil’s Congress is currently discussing four crypto-related bills.
Felix went on to state that the objective of self-regulation is to protect innovators while allowing companies to be innovative. To this end, the code aims to incorporate practices that promote crypto trading while preventing the use of cryptocurrencies for scams and extortion.
A self-governing regulatory framework
Explaining why it was relevant to introduce self-regulation, Felix said that the Brazilian government does not have a regulatory framework for the nascent sector. While he believes that the government will issue one eventually, he thinks that it might take some time.
The self-governing framework directs that all crypto firms in the country apply the basics of ‘Know Your Customer (KYC)’ and increase their security measures. On top of this, they will have to improve their legal infrastructure, pledge to respect free competition and respect the privacy of their user’s information. ABCripto will reportedly sanction any member that fails to observe these regulations. The code will also feature guidelines for issuing warnings, fines, or even expelling members that are not compliant.
