Brazil's Central Bank to Phase Crypto Regulation

Brazil's Phased Approach to Crypto Regulation

Brazil's central bank has announced a phased strategy for regulating crypto-assets and virtual asset service providers. This approach, expected to deliver regulatory proposals by the end of the year, follows a 2022 law aimed at structuring the crypto landscape. The move signifies a shift in timeline, with the completion of regulations now anticipated beyond the originally projected date of June 2024.

Public Consultations and Input Gathering

The regulatory journey began with a public consultation launched in December 2023, which concluded in January. This initial phase was crucial for gathering insights from the public and addressing aspects not covered by the 2022 law, like asset segregation for virtual asset service providers. The central bank emphasized the need for "reasonable dedication" due to the diverse activities and structures in the virtual assets sector.

Second Consultation and Future Steps

The central bank plans to initiate a second public consultation in the latter half of the year. This next phase will leverage the feedback obtained to draft comprehensive regulatory texts. The aim is to establish a robust regulatory framework with broad societal support. This phased approach reflects the central bank's commitment to creating a well-rounded regulatory environment for crypto-assets in Brazil.

By taking these steps, Brazil's central bank seeks to ensure that the regulatory framework is both inclusive and adaptable to the evolving crypto market, ultimately aiming for a balanced and effective regulation by 2024.