Crypto taxation has become a matter of political urgency in the Brazilian Congress, which will be responsible for determining the future of the crypto industry in Brazil. According to recent news, the new cryptocurrency taxation scheme, imposed by President Luiz Inácio Lula da Silva via a Provisional Measure decree, will be discussed in the coming days to approve it or repeal it.

The measure, which some are qualifying as illegal due to its reach and scope, hints at the taxation of decentralized finance activities, including self-custodied assets under its oversight.

The new taxation scheme must be repealed due to its ambitions, potentially reaching the pockets of every holder and trader who trades even a few dollars of cryptocurrency, thereby affecting the usage and adoption of these assets in Brazil.

At the same time, it significantly reduces the amounts that heavy crypto holders must pay, decreasing the tax percentages from 20% and even 22% to 17.5%, benefiting those with large holdings.

Furthermore, what might be even worse is that the measure could send cryptocurrency users underground, affecting the viability of cryptocurrency companies in Brazil and incentivizing a secrecy-based crypto culture.

Thankfully, while there is no clear consensus on the resolution of the issue in favor of one side or another, some lawmakers have already introduced legislation that may still seek to repeal these measures, even if they are approved by Congress.

The future of the cryptocurrency industry in Brazil and the viability of using digital assets as a savings measure will be affected by this decision. Let’s hope that lawmakers decide against this quickly issued cash-grab taxation system and start a serious debate for a more lenient and less disruptive scheme.

Read more: Brazilian Congress to Debate Lula-Imposed Crypto Tax Scheme

Read more: Brazil’s Congress up in Arms Against ‘Flawed’ Cryptocurrency Tax Decree

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