Brazil’s Lula’ Da Silva Wins: What it Means for Crypto?

After narrowly beating his right-wing opponent, incumbent Jair Bolsonaro, in a hotly contested run-off election, Luiz Inácio Lula da Silva is expected to become the next president of Brazil.

The Marxist former president, also known as “Lula,” earned more than 60 million votes, which broke his previous record from 2006. The election commission in Brazil reports that Lula da Silva, who once expressed support for the central bank’s involvement in cryptocurrency, got 50.90% of the vote versus Bolsonaro’s 49.10%, denying him a second term despite the significant participation of his supporters.

What Effects could Lula’s win have on Crypto?

Luis Inacio Da Silva, who presented various manifestos before the Brazilian presidential elections, notably stated that the Central Bank of Brazil should be in charge of creating a regulatory framework for cryptocurrencies. In his view, the influence of digital assets should be assessed to prevent any negative consequences that cryptocurrencies could have on the national economy.

The now president-elect sees the cryptocurrency industry as a recently experienced tremendous growth, prompting officials to focus on the sector. He added that the legal structure could aid in preventing fraudulent trading practices and other unlawful activities that users of crypto assets could engage in, such as money laundering and tax evasion.

Previously, the aspirant had been part of an advocate to eliminate Brazil’s reliance on foreign currency markets. Lula believes keeping an eye on the bitcoin market will prevent any detrimental effects on the economy.

In July, Lula declared that he would support the creation of the SUR as Latam’s official currency (Spanish for the south). Regardless of his claims then, the deputy chamber of the Brazilian Congress already had a bitcoin legislative proposal under consideration.

Dating back to this manifesto, his recent win in the elections could be a driving factor for brazil to look more into the blockchain sector to regulate the digital assets field better.

More on Brazil and cryptocurrency

In June, Brazilian lawmakers proposed a bill to allow crypto payments showing the nation’s interest in the sector. This, in line with Lula’s win, could see Brazil considering a legal tender for the sector under Brazilian law. The Brazilian real is recognized as the nation’s official currency by Decree-Law 857-69 and Law 10192/01. Cryptocurrencies are often regarded as assets.

Initial Coin Offerings may be governed by the Capital Markets Law and the Brazilian Securities Exchange Commission’s (CVM) regulatory framework, at least those that organically adopt the functional characteristics of a security. As a result, CVM Ruling 400/03 and additional CVM advice may apply to the offers.

Currently, virtual currency-specific anti-money laundering regulations are not covered by Brazilian legislation. Various situations cover virtual currencies under the Anti-Money Laundering Law. Governments and agencies still need to pass legislation controlling cryptocurrencies. Therefore, it is still being determined if crypto mining is legal in most nations.

With countries like Vietnam making advancements in the crypto ecosystem, Brazil is now expected to be next in line to join the group in making significant steps in the sector due to their recent election of the crypto-enthusiastic Lula.