Jai Sahu
Brazil’s central bank introduced a multi-phase plan on Monday to regulate crypto and virtual asset service providers, with plans to finalize these regulatory proposals by the end of this year.
These new regulations will set rules to ensure greater transparency regarding the potential benefits and risks of these investments, according to the bank. They chose a phased approach to regulate the country’s cryptocurrency service market effectively.
“From this point on, the contributions will be used, and the regulatory proposals will be finalized at the end of 2024,” the bank stated.
Reuters reported that the central bank’s latest decision delays the finalization of the process. This decision follows a 2022 law that granted the bank the authority to develop these regulations.
During a congressional hearing last year, Otavio Damaso, the central bank’s director of regulation, anticipated completing the crypto regulations by June 2024.
The bank held a public consultation on the matter in December 2023, which concluded in January. Subsequently, it announced another public consultation for the second half of this year.
The central bank informed Reuters that the initial consultation aimed to gather public feedback on the proposed regulations. It also covered aspects not addressed by the 2022 law, such as the segregation of assets by virtual asset service providers.
To address this, it explained that the first public consultation required “reasonable dedication from the teams involved.”
The bank is also progressing with regulating stablecoins, especially those used for payments and foreign exchange.
Brazil Bans Crypto Donations in Elections In a move to control cryptocurrencies in campaign finance, Brazilian authorities recently enforced a ban on crypto donations to political parties and candidates.
The electoral court justified its ban, emphasizing the importance of transparency and traceability in campaign financing. It affirmed its commitment to protecting elections “from irregular or illicit practices.”