Brazil and Chile of South America continent have been having a similar take on cryptocurrency sector as the banks of both the countries shut down the bank accounts and stopped services to crypto exchanges. This move has led the crypto exchanges in both the countries to come up with means to counteract regulatory measures.
Chile and Brazil curbs crypto business, crypto exchanges are in lurch
Recently, banks in Chile cut down its ties with the cryptocurrency exchanges and further closed their accounts. In a letter, one of the country’s bank made the decision
“not to operate with companies engaged in the issuance or creation, brokerage, intermediation or serve as a platform for calls or so-called cryptocurrencies.”
Apparently, almost all the banks have stopped servicing cryptocurrency exchanges. In response, crypto exchanges have decided to fight the banks by going to the court. One of the crypto exchanges’ founder stated:
“They’re killing an entire industry. It won’t be possible to buy and sell crypto in a safe business in Chile. We’ll have to go back five years and trade in person. It seems very arbitrary.”
As for Brazil, it also holds a similar stance on cryptocurrencies as the country barred the investment funds from buying bitcoins and shut down the bank accounts of brokers. However, the regulators were quick to levy taxes on crypto tradings with a 15 percent tax rate on the gains of 35,000 reais or $11,000 approximately.
Brazil crypto exchanges form associations while Chile holds Blockchain summit
Both the countries of Latin America has made it close to impossible for crypto exchanges to operate their businesses. In order to combat this scenario, cryptocurrency exchanges of Brazil joined the forces and created a cryptocurrency association called Associação Brasileira de Criptoeconomia (ABCripto) to protect the interests of the users.
However, it looks like the exchanges in the country are so much into this idea that they have created a rival group called Associação Brasileira de Criptomoedas e Blockchain (ABCB). Both the organizations have different takes on crypto regulations but believe in working together.
In an interesting twist of events, the first blockchain summit of South America will be held in Chile which would have more than 300 attendees and about 20 national and international exhibitors. The event would also involve senior executives of Chilean Banks and companies.
Apparently, Chile’s capital Santiago was chosen because last year “Chile was part of the boom in the adoption of cryptocurrencies, where more than US$50 million were traded in more than 3 exchanges that operate nationwide.” Given the crypto scenario of the country, it shows mixed feelings from Chile, for sure.
As organizations are formed and crypto exchanges take the court route, meanwhile, new exchanges are also trying to gain entry into the market. Recently, an investment firm in Brazil announced its plans to launch a crypto exchange.
It would be interesting to know how exactly crypto exchanges in both the countries manage their operations. How do you think Chile and Brazil crypto regulations will pan out?