While the world is still divided over regulations for cryptocurrencies, another country has moved forward and eased regulations for the institution to buy cryptocurrencies- well at least indirectly. In a recent announcement securities regulator of Brazil, Comissão de Valores Mobiliários (CVM) has allowed investment funds in the country, to indirectly invest in the crypto ecosystem by acquiring derivatives and foreign funds.

Brazilian funds now can in “other assets” traded in other jurisdictions

According to the to the circular, that is available on the website of Securities and Exchange Commission of Brazil (CVM), the regulator has directed administrators, managers, and auditors of investment fund, who wanted to seek clarification, that it does not prohibit indirect investment in cryptocurrencies while dealing in foreign funds, as long as these are regulated where they’re traded.

The notice, that is published in Spanish, quotes Daniel Maeda, SIN’s superintendent who said that (translated using google translate)

“Instruction 555, does not prohibit indirect investment in cryptos when dealing with overseas investment, ” “However, it is incumbent upon the managers, managers and independent auditors to observe certain steps in the acquisition and maintenance of these assets in the portfolio,” he added.

The notice further covers certain guidelines and cautions in relation to buying of crypto-based funds.

While bringing attention to illegal operations Daniel Maeda says:

“We call attention to money laundering, unfair practices, conducting fraudulent operations or manipulating prices, among others,” “an adequate way to address such concerns is investment through exchanges that are subject to oversight by regulators with these concerns,”

The notice further cautions about the Governance and diligence and role of Independent Auditors

The circular warns of the importance of due diligence and expects the funds to avoid the purchase of a fraudulent crypto.

“We indicate the verification of the relevant variables associated with the issuance, management, governance and other characteristics of cryptocurrencies”, commented the superintendent.

With respect to the role of Independent auditors, the superintendent states

“In line with the expected attributions of the auditor, he should be able to conduct adequate and proportionate procedures in relation to any crypto assets held by the fund when preparing its report on the financial statements.”

Also, read: Brazil’s Biggest Financial Services Company Enters Cryptocurrency Space

Cryptocurrencies in Brazil is on a positive growth trajectory

Brazil, a country that boasts the largest economy in South America, is becoming increasingly interested in cryptocurrencies and associated blockchain technology, with the public, the government, and the education system all hopping on the bandwagon. In 2016, Brazilians moved $160 million in and out of Bitcoin. Last year, 2017, that number was up to around $2.4 billion. In relation, a year ago Foxbit had roughly 100,000 registered users. Today, the cryptocurrency exchange has more than 400,000 — out of an estimated 1.4 million that have opened accounts with them and their three main competitors over the past two years. Compare that to the roughly 600,000 who have stock brokerage accounts, it’s easy to see that Brazilians have been turning to cryptocurrencies in droves.

To gain an earlier movers’ advantage and to capitalize on this growing demand, Grupo XP, the owner of XP Investimentos SA, announced its plan to an exchange for Bitcoin and Ethereum trading in the coming months. Even PundiX chose to launch its POS devices in Brazil to capture this fast-growing and evolving cryptocurrency market as it partnered with Bit Capital the largest OTC dealers in Brazil for cryptocurrencies.

The recent regulation shows a positive inclination of the regulators in support of cryptocurrencies and the changing regulatory scenario in Brazil seems to be a positive indication. Such moves may make Brazil the frontrunner in the cryptocurrency race in South America.

Will Brazil draw more regulations in favor of the cryptocurrencies? Do let us know your views on the same.

The post Brazil Indirectly Opens “a Window” for Investment Funds to Buy Bitcoin appeared first on Coingape.

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