Brazil’s government and its Central Bank have proposed new regulatory measures this month. They seek to intensify control over cryptocurrencies and their illicit use. The proposals focus on stablecoin use in Brazil and the ability to seize digital assets.
The key proposal comes from the Central Bank. It is BCB Resolution 521. This rule classifies the purchase, sale, or exchange of virtual assets pegged to fiat as foreign exchange operations. Therefore, Virtual Asset Service Providers (VAPs), such as trading platforms, will require authorization. They must comply with foreign exchange market rules.
Can these measures truly curb illicit activities without stifling innovation?
On the other hand, President Luiz Inácio Lula da Silva sent a bill to Congress. This legislation would allow authorities to seize property, including “virtual assets,” during criminal investigations. Furthermore, the bill allows for the forced conversion of such assets into the national currency. The objective is clear: to close loopholes for money laundering.
These actions respond to previous concerns. Gabriel Galipolo, president of the Central Bank, had already expressed concerns. He noted the difficulties in tracking stablecoin use. Galipolo mentioned that crypto asset use “maintains some kind of opaque vision for taxation.” This facilitates tax evasion and other illegal activities.
However, Brazil remains a regional leader in digital asset adoption. It is Latin America’s largest economy and its biggest crypto market. The country has numerous cryptocurrency ETFs, including Bitcoin and Ethereum funds. These new regulations seek to balance innovation with financial security. Congress must still approve the presidential bill.
