Regulation
Brazil’s central bank prepares year-end proposal for cryptocurrency regulation
Point 1 of 2 A general view of the Central Bank headquarters building in Brasilia, Brazil, February 14, 2023. REUTERS/Adriano Machado/File Photo
[1/2]A general view of the Central Bank headquarters building in Brasilia, Brazil, February 14, 2023. REUTERS/Adriano Machado/File Photo Buy licensing rightsNew tab, opens a new tab
BRASILIA, May 20 (Reuters) – Brazil’s central bank announced on Monday its decision to divide the process of regulating crypto-assets and virtual asset service providers into phases, with regulatory proposals expected by the end of this year.
The decision effectively delays the completion of the process following a 2022 law on the matter, which paved the way for subsequent regulation by the central bank.
In a congressional hearing last year, the bank’s regulatory director, Otavio Damaso, predicted the regulation would be completed by June 2024.
After launching a public consultation on the topic in December 2023, which concluded in January, the central bank said it will now open a new consultation in the second half of this year.
The central bank told Reuters that the first public consultation aimed to gather input from the company, while also addressing issues not covered by the 2022 law, such as asset separation of virtual asset service providers.
This required “reasonable dedication from the teams involved in the regulatory work,” he said, adding that the diversity of activities conducted by entities in the virtual asset sector and the various structures of these entities made this preliminary effort necessary.
“The second public consultation, now focused on regulatory texts, aims to use initial inputs to, once again with broad societal support, establish a robust regulatory framework,” the central bank said.
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Reporting by Marcela Ayres in Brasilia Editing by Gabriel Araujo and Matthew Lewis
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