The environmental token industry could face new issuance rules in Brazil. The change is a proposal from a new bill in the Senate that could change the regulation of the sector.

The bill is still being processed in the Senate and there is no scheduled date for voting.

Bill seeks to regulate environmental tokens

Bill 3434/2024, authored by Senator Fernando Dueire (MDB-PE), proposes to regulate the “creation, issuance, registration, commercialization and management of tokens for digital environmental assets”. The objective is to promote sustainable environmental conservation practices.

For the purposes of the law, digital environmental assets are considered to be “digital titles or certificates issued on distributed registry technology platforms (blockchain or other similar technology), representing rights or shares in natural resources, ecosystem services, conservation or environmental restoration projects”.

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In short, the bill clarifies terms and imposes some restrictions on issuers of environmental tokens. For example, paragraph V of Article 5 establishes that digital environmental service providers must:

“Commit to environmental responsibility, ensuring that financed projects effectively contribute to environmental conservation, climate change mitigation and sustainable development, in accordance with the objectives of this Law.” The text also defines what conservation tokens and carbon tokens are.

The bill also imposes requirements to allow the listing of these assets on exchanges. One of them, according to the text, is to “guarantee the authenticity, uniqueness and traceability of the tokens”. To do this, it is necessary to obtain certifications from independent entities that prove the environmental benefits of the assets.

Senator Fernando Dueire believes that the project is necessary because of the global environmental crisis and the loss of diversity. “Tokens allow for the capture of investments in an innovative and efficient way, promoting sustainability and mitigating negative environmental impacts,” he explains.

Dueire explains that the bill aims to promote a “regulatory framework that balances innovation, transparency and environmental responsibility.” This will ensure transparency in the process and ensure benefits that include the granting of tax incentives.

Finally, the project was filed on September 5, 2024, and since the 15th of that month, it has been awaiting the appointment of a rapporteur. There is no deadline for when it will advance in the house.

The article Bill seeks to regulate environmental tokens in Brazil was first seen on BeInCrypto Brazil.