The Brazilian government has unveiled a new blockchain network in an effort to combat corruption in public expenditures by efficiently tracking them. The network was launched in a YouTube event after a cooperation agreement was signed by the Uniam Court of Accounts (TCU) and the Brazilian Development Bank (BNDES). The move is part of Brazil’s interest in being at the forefront of integrating blockchain technology into its general administrative system and helping to improve efficiency and traceability in the process.
According to a press release issued by TCU ahead of Monday’s launch event, the Brazilian Blockchain is still under development but will be used by a number of government institutions in an effort to improve services to citizens and provide better transparency over public expenditures.
“The network, both public and not-for-profit, will be national in scope and will connect participating institutions in a governance structure and technology infrastructure with the aim of facilitating the adoption of blockchain technology in solutions aimed at the public interest,” reads issued when translated from Portuguese verbatim.
The launch of the Brazilian Blockchain Network also comes at a time when the Brazilian tax authority, the Federal Revenue of Brazil (RFB), has passed a law requiring investors to pay personal income tax when they exchange one digital currency for another.
According to a separate report by CoinGeek, the law states that even when digital currency transactions do not include the Brazilian Real or any other fiat currency, any profit made from the transaction is subject to tax.
“Capital gain calculated on the sale of cryptocurrencies, when one of them is used directly for the acquisition of another, even if the cryptocurrency has not previously been converted into riyals or other fiat currency, is taxed through the individual income tax, which is subject to progressive rates in accordance with the provisions of Article 21 From Law No. 8981 of January 20, 1995.”
However, the law will not apply to all traders. The RFB sets a maximum reporting requirement on transactions above 35,000 riyals (approximately Rs 5.6 lakh). The Regional Football Association states that the announcement was made following consultations that began last year.