Welcome to Latam Insights, a compilation of the most relevant crypto and economic news from Latin America over the past week. In this week’s edition, the Argentine lower chamber will investigate Libra’s launch, cryptocurrency can now be legally seized in Brazil, and the Brazilian CBDC pilot, drex, has hit a roadblock.
Latam Insights: Argentine Congress Takes Aim at Libra, Crypto Now Seizable in Brazil
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Argentine Congress to Formally Investigate Government Officials’ Involvement With Libra
The lower chamber of the Argentine Congress approved the creation of a commission that will be focused on investigating the involvement of high officials of the government in the launch and debacle of La Libertad Avanza, also known as the Libra token.
The initiative, whose result was qualified as a “hard setback” by local media, received the support of 128 representatives from left-leaning blocs, while 93 representatives rejected the idea and only 7 abstained from voting.
24 representatives will be in charge of this investigation, which will examine different testimonies to determine whether President Javier Milei, his sister Karina Milei, and other officials took part in the launch and subsequent debacle of the currency.
The commission will start its investigative tasks on April 23, and it will have three months to issue a report on its findings, assigning responsibilities to the ones involved.
Historic: Cryptocurrency Assets Are Now Legally Seizable in Brazil
Cryptocurrency is being acknowledged and integrated into the international legal and economic system. The National High Court of Brazil (STJ) issued a landmark decision establishing that crypto could be seized as payment for outstanding debts.
The case, which has now put the digital assets system in the sights of the judicial system, enables a new set of opportunities to redeem debts from actors that have not used the traditional finance system for storing funds.
The court based its decision on the fact that cryptocurrencies are assets liable to taxation, whose transactions must be reported to the Federal Revenues Service, and even if not legal tender, these can be used as a form of payment and a store of value.
Brazilian Drex Hits Privacy Roadblock as Support From External Partners Wanes
Drex, the Brazilian central bank digital currency ( CBDC) pilot, is facing headwinds as the process has slowed its development due to a reduction in the level of resources destined for the project.
According to Valor Economico, two of the largest companies involved in designing the privacy solution for the project, Microsoft and EY, have recently reduced the manpower directed to these efforts. The impasse has to do with the recent behavior of the central bank regarding the closure of the second phase of the drex pilot without approving any of the projects presented by participants.
Drex is at a standstill after none of the privacy proposals, that need to guarantee the secrecy of transactions while allowing regulators to scrutinize them, had fulfilled the requirements of the central bank in this regard.
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