Brazil’s central bank has issued its most sweeping crypto regulations yet, creating a formal licensing regime for service providers and classifying a wide range of crypto activities as subject to foreign exchange and capital markets rules.
The framework introduces three resolutions that define how crypto businesses must operate in South America’s largest economy, the amount of capital they must hold, and how international crypto transactions will be treated by law. The rules come into effect on February 2 and existing businesses have nine months to comply.
The regime marks Banco Central do Brasil’s most comprehensive attempt yet to govern its fast-growing, but largely unregulated, crypto sector. Although the central bank has floated various proposals since 2019, progress has stalled due to institutional friction and industry resistance.
The challenge “was finding a way to unite innovation and security,” Gilneu Vivan, the bank’s regulatory director, said at a press conference, according to local media outlet Portal do Bitcoin. “The crypto market relies heavily on technology and has very significant obligations related to anti-money laundering. All of this requires guarantees that it will be executed well.”
Some bank regulations, including capital requirements and deadlines, have come under attack from the crypto industry.
Capital levels surprise
Companies in the sector will have to hold a minimum capital of 10.8 million reais ($2 million), the bank said. Depending on the type of business, some companies will need to hold at least 37.2 million reais. This is well above the 1 to 3 million reais proposed during the public consultation phase.
Bernardo Srur, president of the Brazilian Cryptoeconomics Association (ABCripto), called the framework “positive and necessary” but criticized both the capital ban and the short compliance window which he said could deter competition.
Companies that fail to meet the compliance deadline, which includes proof of capital levels, cybersecurity controls, customer due diligence practices and risk assessments, will be banned from operating. Foreign companies operating in the country must create a local entity and transfer their operations under this structure.
The rules establish a new type of business entity: Sociedades Presstadoras de Serviços de Ativos Virtuais (SPSAV), or virtual asset service providers (VASP), which now must be licensed by the central bank and are divided into three categories based on the services they offer: intermediaries, custodians and brokerages.
Exchange controls hit self-custody wallets
The framework also integrates several types of crypto transactions, including those involving stablecoins, within Brazil’s cross-border exchange and capital control regime. These include international payments with cryptocurrencies, transfers to and from self-custodial wallets, and crypto-to-fiat transactions.
Companies authorized to operate in Brazilian foreign exchange markets, including VASPs, can carry out these transactions, but with restrictions that include a cap of $100,000 per transaction. From May 4, they will have to report these transactions to the central bank monthly with details such as client details, asset types, reais amounts and links between counterparties.
VASPs are also prohibited from handling physical currency (domestic or foreign) and using foreign cash for cryptocurrency purchases.
The goal, officials say, is to reduce regulatory arbitrage and bring transparency to crypto’s role in Brazil’s balance of payments and economic statistics.
