Bank

Bitcoin

when

<ul>
 <li aria-level="1">Brazil updates SCE-IED to include cryptocurrencies in foreign capital declarations, effective from October 2024.</li>
 <li aria-level="1">New regulations require detailed reporting of digital assets in financial statements, enhancing transparency.</li>
</ul>
The Foreign Capital Information System for Direct Foreign Investment (SCE-IED) in Brazil has recently been updated to include the declaration of virtual assets, such as cryptocurrencies, as a part of foreign investments. This update, effective from October 2024, marks the first time the system has recognized cryptocurrencies.
The regulatory change mandates the declaration of foreign contributions, aiming to simplify the tracking process by the Central Bank of Brazil (BC). This adjustment facilitates the inclusion of digital assets, like cryptocurrencies, in financial statements. <a href="https://www.ethnews.com/say-goodbye-to-delayed-transfers-usdc-now-directly-accessible-in-brazil-and-mexico/" rel="noopener noreferrer nofollow">Previously</a>, companies lacked a mechanism to declare these assets when received from foreign investors.
The revised guidelines detail the procedure for declaring assets. According to the documentation:
<blockquote>
 “On the capitalization tab, capital increases are accounted for the recipient by verifying tangible or intangible assets, imported without exchange coverage, or virtual assets. It is required to report: the type of asset, the date of capitalization, and the capitalized value in Brazilian reais (R$).”
</blockquote>
The guideline further categorizes digital assets into those with and without an issuer. It defines an asset with an issuer as one that has a defined issuer responsible for the asset’s counterparty liability. 
The category includes stablecoins, which are tied to a reference currency, and Central Bank Digital Currencies (CBDCs), which are digital representations of national currencies issued by central banks or monetary authorities.
Conversely, a virtual asset without an issuer is described as one that lacks a defined issuer and counterparty liability, typically generated through computational processes like proof of work (‘mining’) and proof of stake. Examples of such assets are Bitcoin and Ethereum.
This regulatory update removes legal uncertainties for companies, enabling them to accept <a href="https://www.ethnews.com/brla-token-redefining-financial-infrastructure-in-brazil-with-xrp-ledger/" rel="noopener noreferrer nofollow">investments in cryptocurrencies</a> without fear of future complications. This move is seen as part of the BC’s efforts to modernize financial regulation.
Furthermore, the Central Bank of Brazil is also advancing in its development of its own CBDC, named Drex, which has now entered the second phase of its pilot program. This development is a significant step towards <a href="https://www.ethnews.com/breakthrough-in-brazil-how-solanas-newest-etf-is-redefining-crypto-investments/" rel="noopener noreferrer nofollow">integrating crypto currencies</a> into Brazil’s formal financial system, reflecting a broader trend of acceptance and regulation of cryptocurrencies globally.
The post <a href="https://www.ethnews.com/brazils-sce-ied-update-2024-cryptocurrencies-now-recognized-in-foreign-investment-declarations/" rel="noopener noreferrer nofollow">Brazil’s SCE-IED Update 2024: Cryptocurrencies Now Recognized in Foreign Investment Declarations</a> appeared first on <a href="https://www.ethnews.com" rel="noopener noreferrer nofollow">ETHNews</a>.

Brazil’s SCE-IED Update 2024: Cryptocurrencies Now Recognized in Foreign Investment Declarations

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