Brazil’s central bank initiated public consultations on several matters related to the regulation of virtual asset service providers.
Banco Central do Brasil (BCB) proposed amendments to the regulations governing virtual asset service providers (PSAV) operating in the country’s foreign exchange market.
Specifically, the proposals seek to clearly define the activities of PSAVs in the following areas:
- cross-border payments and transfers via virtual assets;
- buying, selling, exchanging, or holding virtual assets owned by non-residents in Brazilian reais;
- transactions involving virtual assets denominated in foreign currencies.
BCB suggests clarifying the requirements and restrictions for PSAVs conducting these activities, along with a licensing regime for virtual asset service providers. Besides, PSAVs would be required to record and, upon request, provide regulators with client identification data, the amounts and types of digital assets involved, and general details about transactions.
Amendment 76-N, which would prohibit PSAVs from transferring virtual assets denominated in foreign currencies to non-custodial crypto wallets, drew special attention of the crypto community.
The BCB’s proposals are now open for public discussion, inviting all interested parties to participate until February 25, 2025. According to industry media, the proposals received over 50 detailed comments, with many highlighting concerns over the constitutionality of restrictions on self-custody of digital assets.
In H1 2024, global transaction volumes involving stablecoins exceeded $2.6 trillion. At that, Brazil remains one of the largest markets for stablecoins, where they became a popular alternative to traditional banking services.
