Brazil’s New Crypto Regulations: A Step Towards Safer Crypto Transactions
In a significant move to enhance the security and transparency of its burgeoning cryptocurrency market, Brazil’s central bank has unveiled comprehensive guidelines. These regulations primarily aim to reduce fraudulent activities and money laundering risks associated with virtual currencies. The announcement follows the establishment of a legal framework for cryptocurrencies in 2022, which necessitated further regulatory measures from the central bank.
Comprehensive Guidelines for a Secure Crypto Market
During a recent media briefing, Gilneu Vivan, who serves as the director of regulation at Brazil’s central bank, stressed that these newly introduced rules are meticulously crafted to prevent scams and fraudulent activities. The guidelines are set to come into effect in February 2026, encompassing the authorization process for foreign-exchange entities, securities brokers, distributors, and virtual-asset service providers.
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The central bank’s official website has clarified that any transactions involving the purchase, sale, or exchange of cryptocurrencies linked to fiat currencies—known as stablecoins—will now be considered foreign exchange operations. This categorization also applies to international payments or transfers that utilize crypto assets, including those settled using electronic payment methods or cards.
Moreover, the revised guidelines will reinforce existing regulations concerning customer protection, transparency, and anti-money laundering measures. Virtual-asset service providers will be required to comply with standards analogous to those of traditional financial institutions, thereby ensuring a more secure trading environment.
UK’s Progress in Stablecoin Regulation
Simultaneously, the Bank of England has proposed a new regulatory framework for stablecoins, which allows issuers to allocate up to 60% of their backing assets in government securities. This proposal signifies a pivotal change in the Bank’s stance towards the stablecoin sector, with plans to introduce these regulations in the coming year.
Notably, the Bank of England has suggested imposing limits on the amount of stablecoins that can be held by individuals and businesses. This approach diverges from the regulatory strategies adopted by the European Union (EU) and the United States.
Sarah Breeden, Deputy Governor for Financial Stability at the Bank of England, stated that the proposals are essential steps towards building a robust stablecoin framework in the UK. The Bank has shown openness to feedback and has adjusted its proposals based on stakeholder insights, particularly concerning the relationship between stablecoin issuers and the central bank.
In addition, the Bank of England is evaluating the possibility of offering central bank liquidity facilities to systemic stablecoin issuers during market stress, providing a safety mechanism should these issuers encounter difficulties in liquidating their reserve assets in the private market.
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