Regulation
Brazil’s central bank will formulate plan for stablecoins and cryptocurrencies this year – Ledger Insights
Today the Central Bank of Brazil announced its plans to regulate cryptocurrencies, including stablecoins. This year he will look at formulating rules for stablecoins used for payments and foreign exchange, but he described this work as “internal planning.” The central bank will launch a second consultation on virtual asset service providers (VASPs), including the rules they must adhere to and their authorisation. Furthermore, it plans to provide a complementary framework including prudential regulation and VASP reporting.
The regulatory proposals will be finalized in 2024, with the key aim of protecting investors from fraud and scams. Banco Central do Brasil also wants to ensure that VASPs adhere to anti-money laundering (AML) procedures and similar compliance procedures.
It follows the central bank’s first consultation, which concluded in January and examined various cryptocurrency-related topics. These included segregation of resources, risk management, cybersecurity and disclosures that reflected the global nature of the consultation.
A 2023 presidential decree gives the central bank the authority to regulate virtual asset services and VASPS, although the local Securities and Exchange Commission (CVM) retains authority over securities.
Meanwhile, it’s a busy time for the central bank. He hosts the G20 Techsprint program and is working on it DREX, its wholesale central bank digital currency (CBDC) initiative. DREX is positioned to support financial inclusion using blockchain as an open banking solution. THE Wholesale CBDC will support the interbank regulation of tokenized deposits, which will be used for on-chain settlement. Brazil already has its own successful Pix mobile payment system, hence the emphasis on expanding other aspects of finance, including credit and wealth management through DREX.