In order to regulate cryptocurrency in Brazil, Brazilian Central Bank (BACEN) published their regulatory roadmap in relation to virtual asset service provision activities.
The goal is to provide the Brazilian cryptoeconomy with the security and transparency necessary for this market’s success, with a focus on governance, good practices, and minimum authorization requirements.
The measures will be developed and implemented aiming the protection of the investing public, with a focus on Virtual Asset Service Providers (VASPs), which will need authorization from BACEN to operate the direct offering, intermediation and custody of cryptoassets.
We highlight below the main points of BACEN’s regulatory roadmap for the Brazilian crypto economy in 2024:
1. New Public Consultation: The intention is to deepen understanding with the market in the second half of the year, with emphasis on the general rules for the operation and authorization of VASPs. The first public consultation (broader) ended in January 2024 and the comments and manifestations are being systematized;
2. Regulation of Stablecoins: BACEN intends to delimit the internal planning for the regulation of currencies linked to stable assets (stablecoins), with emphasis on its own competence regarding payments and the foreign exchange and international capital markets;
3. Adjustments to the Complementary Framework: Efforts will be focused on specific operational standards and ancillary obligations such as risk management requirements, minimum capital, suitability, accounting, and provision of information, as well as the integration of VASPs into markets such as exchange and international capital.
BACEN seeks to maintain the stability of the National Financial System, its main function. Through updates and adjustments, aligned with international positions, the evolution of market understanding and that of other regulators (such as the CVM, the Brazilian SEC), this schedule will be better detailed and may address topics such as specific virtual assets.
The news comes simultaneously with the postponement of DREX to 2025 (Brazilian digital currency), due to the insufficient maturity presented by the technological privacy solutions in the Brazilian CBDC’s pilot, which indicates that Brazilian regulatory authorities are concerned about the effectiveness of the standards implemented, although they continue to stimulate technological innovation and financial progress.
