Understand the Central Bank’s regulation proposal for the crypto market

On Monday (20), the Central Bank of Brazil outlined the next steps in the process of regulating the cryptoactive market. Without offering specific dates, the institution revealed that it will hold a second public consultation in the second half of this year.

This new consultation cycle will focus on establishing general standards for service providers in the sector, as well as the authorization model for their operations.

The first public consultation, conducted between December 14, 2023 and January 31 of this year, addressed several topics. The highlight was asset segregation, which was left out of the regulation of cryptocurrencies in Brazil. The active participation of different stakeholders, such as brokers and trade associations, highlighted the importance of this process for the entire crypto ecosystem.

Subsequently, the BC plans to address stablecoins, cryptocurrencies backed by fiat currencies. This step will include “internal planning regarding the regulation of stablecoins”, especially with regard to the Central Bank’s areas of competence in payments and foreign exchange markets.

“The regulation aims to offer minimum requirements for virtual asset service providers to carry out their activities, also dedicating themselves to providing adequate practices when dealing with their customers. The idea is to evolve in the construction of normative acts that will deal with virtual asset service providers, including business and authorization aspects”, declared Nagel Lisanias Paulino, from the BC Financial System Regulation Department.

Finally, the institution will dedicate itself to “developing and improving the complementary framework to welcome entities”. This effort demonstrates the Central Bank’s commitment to establishing a solid regulatory framework for the cryptoactive market.

Legal milestones and next steps for the Central Bank

After the sanction of Law 14,478, known as the Legal Framework for Cryptoactives, the BC assumed responsibility for regulating the crypto market in Brazil. One of the main guidelines of this legislation is the requirement for an express license from the Central Bank for companies wishing to operate in the country.

Furthermore, the president of the BC, Roberto Campos Neto, and the director of organization of the financial system, Renato Dias de Brito Gomes, met this Tuesday (21) with executives from the 2TM group, controller of Mercado Bitcoin (MB). This meeting took place one day after the announcement of the cryptoactive market regulation agenda.

The meeting, held at the BC headquarters in São Paulo, between 11:30 am and 12:30 pm, focused on “dealing with institutional matters”. In addition to the BC representatives, Roberto Dagnoni, CEO of 2TM, Reinaldo Rabelo, CEO of MB, Vanessa Butalla, CLO & CCO of 2TM, and Murilo Portugal, Member of the Advisory Board of 2TM, were present.

The Central Bank’s expectation is that the process of preparing regulatory proposals will be completed by the end of this year, continuing the effort to establish a clear and robust regulatory environment for the cryptoactive market in Brazil.