Regulation
The Central Bank of Brazil announces a phased approach to cryptocurrency regulation
Brazil’s central bank revealed on Monday that it will implement a phased approach to regulating crypto-assets and virtual asset service providers, with detailed regulatory proposals expected by the end of 2024. This new timeline marks a shift away from the completion target initial set for June 2024, following the legislative foundations laid by a 2022 law.
In a statement to Reuters, The central bank explained that the decision to extend the regulatory calendar comes after careful consideration of feedback gathered from a public consultation held between December 2023 and January 2024. This initial consultation was aimed at gathering broad societal input and addressing non-relevant topics. fully covered by the 2022 agreement. legislation, such as the separation of assets held by virtual asset service providers.
“The first public consultation was crucial in addressing various issues and required significant effort from our regulatory teams,” the central bank noted. “The different nature of activities and organizational structures in the virtual assets sector made this preliminary phase necessary.”
The central bank’s director of regulation, Otavio Damaso, initially predicted during a congressional hearing last year that the regulatory process would be finalized by mid-2024. However, the complexity of the sector and the extensive feedback received have pushed the bank to review its timing.
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The central bank has announced that a second public consultation will begin in the second half of this year, focusing on the drafting of regulatory texts. “This next phase aims to use the initial input to build a comprehensive regulatory framework, once again incorporating broad social support,” the central bank said.
This phased approach underlines the central bank’s commitment to creating a robust and inclusive regulatory environment for crypto-assets, balancing innovation with necessary oversight. The upcoming consultation will be critical in shaping the final regulations, ensuring they address the unique challenges and opportunities presented by the rapidly evolving virtual asset landscape.
Source: Reuters