Regulation
Brazil develops cryptocurrency regulatory plan, expected by the end of the year
Last Updated: May 21, 2024 12:34am EDT | 1 minute read
The one from Brazil the central bank presented a multi-phase plan to regulate cryptocurrencies and virtual asset service providers on Monday. The goal is to finalize the regulatory proposals by the end of this year.
These regulations will establish rules that will verify and enforce greater transparency on the potential benefits and risks of these investments, the bank said. It said it has opted for a phased approach to effectively regulate the country’s cryptocurrency services market.
“From this point onwards the contributions will be used and the regulatory proposals will be finalized at the end of 2024,” the bank added.
The central bank’s latest decision postpones the finalization of the process, according to Reuters. It follows a 2022 law that gave the bank the authority to develop such regulations.
During a congressional hearing last year, the central bank’s director of regulation, Otavio Damaso, predicted the completion of cryptocurrency regulation by June 2024.
The bank conducted a public consultation on the topic in December 2023, which closed in January. It subsequently announced a new public consultation scheduled for the second half of this year.
The central bank told Reuters the first consultation aimed to gather public feedback on the proposed regulations. It also addressed aspects not covered by the 2022 law, such as how virtual asset service providers should segregate their assets.
To resolve this issue, he explained that the first public consultation required “reasonable dedication from the teams involved”.
The bank is also moving forward with regulating stablecoins, particularly those used for payments and currency exchange.
Brazil blocks cryptocurrency donations during elections
In a move to crack down on cryptocurrencies in election campaign financing, Brazilian authorities solidified the ban on cryptocurrency donations to political parties and candidates last week.
The electoral tribunal defended its ban, underlining the need for transparency and traceability in campaign financing. It declared its commitment to protecting elections “from irregular or illicit practices.”