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Brazil Sets Sights on Crypto Regulation to Build Confidence and Strengthen Regional Leadership

Brazil Sets Sights on Crypto Regulation to Build Confidence and Strengthen Regional Leadership

Bitget-RWA2025/11/12 04:22
By:Bitget-RWA

- Brazil's central bank introduced Latin America's strictest crypto regulations, requiring VASPs to obtain authorization and comply with banking-level oversight by November 2026. - New rules mandate $2M+ capital requirements, classify stablecoin transactions as forex operations, and cap unapproved crypto transfers at $100,000 per transaction. - The framework aims to combat fraud and illicit finance by extending AML protocols to stablecoins, which account for 90% of Brazil's crypto activity, while enhancing

Brazil Rolls Out Sweeping Crypto Regulations to Combat Market Abuse

The Central Bank of Brazil has introduced one of the region’s toughest sets of rules for the cryptocurrency industry, requiring digital asset companies to adhere to oversight standards similar to those of traditional banks and setting strict transaction limits for unauthorized activities. Starting February 2026, all virtual asset service providers (VASPs)—such as exchanges, custodians, and brokers—will need to secure official approval from the central bank to operate, with a compliance grace period extending to November 2026,

. Firms that do not comply will be compelled to leave the sector, signaling a major change in Brazil’s regulatory stance on digital assets, as reported by .

The regulations, detailed in Resolutions 519, 520, and 521, apply existing financial sector standards to crypto businesses, demanding strong governance, cybersecurity measures, and anti-money laundering (AML) controls,

reports. Gilneu Vivan, a director at the central bank, stated that the new framework is designed to prevent fraud, scams, and illegal financial activity while bringing the industry in line with international norms, reports.
Brazil Sets Sights on Crypto Regulation to Build Confidence and Strengthen Regional Leadership image 0
The updated rules also categorize stablecoin dealings and international crypto transfers as foreign exchange transactions, meaning they will face the same regulatory scrutiny as conventional currency exchanges, notes. Transfers involving parties without approval will be limited to $100,000 per transaction, a measure intended to restrict unregulated capital movement, notes.

Stablecoins, which represent close to 90% of Brazil’s crypto transactions, are a central focus of the new policies. By classifying stablecoin payments as foreign exchange, the central bank is closing significant loopholes in AML and transparency requirements,

reports. Providers are now obligated to confirm the ownership and origin of funds for transfers to self-custody wallets, even when the transfers are domestic, notes. This regulatory shift addresses mounting worries about stablecoins being used for tax avoidance and illegal activities, as noted by President Gabriel Galipolo, reports.

The overhaul also sets minimum capital thresholds, requiring companies to maintain at least 10.8 million reais (about $2 million) in capital, depending on their business model,

reports. Although these requirements may increase operational costs for smaller firms, regulators believe the measures will enhance investor confidence and establish Brazil as a leader in digital finance across the region, reports. Chainalysis data shows that Brazil handled $319 billion in crypto transactions from mid-2024 to mid-2025, placing it fifth worldwide, reports.

Meanwhile, lawmakers in Brazil are considering a $19 billion

reserve initiative, known as RESBit, aimed at diversifying national reserves and reducing dependence on the U.S. dollar, reports. Should the plan move forward, Brazil would join El Salvador and certain Asian countries in officially recognizing Bitcoin as a strategic reserve asset, reports.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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