The Brazilian Congress has proposed a tax exemption on all crypto mining rigs and any eco-friendly crypto mining activities in the country.
According to Seudinheiro (a Brazilian media outlet), South America’s largest country hopes these proposals will reduce crypto criticism in the country.
It was also proposed to Congress that cryptocurrency be adopted as a national currency instead of being regarded as a commodity. If the proposal gets the greenlight, crypto exchanges will issue loans and provide financial services to Brazilians.
Irajá Silvestre Filho, Brazilian Senator and businessperson, is the man behind the three proposals currently being discussed in Congress. Although Brazilians embrace crypto, it’s unclear if the new proposals will garner enough support from the legislature.
Brazil to become a “Mecca of mining”
Ray Nasser, chief executive of Arthur Mining Company, said that Brazil could soon become a global “Mecca of [crypto] mining” if the tax exemption bill is passed into law.
If crypto assets such as Bitcoin get adopted as legal tender, the Central Bank of Brazil will have the permission to issue a government-backed digital currency or CBDC (central bank digital currency).
So far, only nine countries have issued CBDCs to residents. Brazil wants to join the list.
According to the International Trade Administration, Brazil generates half of its electricity from renewable sources. A kilowatt-hour of electricity costs about $0.12 in the country, putting it roughly in the middle of the pack.
Crypto rising rapidly in Brazil
Taynaah Reis, chief executive of Moeda (a blockchain finance company in Brazil), said cryptocurrencies have gone mainstream in Brazil.
He further stated that the “regulatory bodies have been very proactive and protective on incentivizing mining and drafting policies on best practices as major businesses announced their plans on including crypto.”
Reis also exclaimed that crypto miners will need to register their equipment with the government — to help in monitoring the ecosystem.
Constant power rationing in Brazil may hamper crypto miners’ efforts, though, as more Bitcoin miners may pose a threat to the power supply. B
“One of the main problems in the energy issue in Brazil is the transmission. We have large energy-generating supplies in the country, and it is possible to promote greater investments in clean energy generation.”
Kazakhstan, which is the world’s second-biggest Bitcoin mining nation, is also grappling with electricity supply issues as power rationing problems persist.