Brazil extends financial sector regulations to crypto service providers

Brazil's central bank has introduced new regulations requiring virtual asset service providers to obtain authorization to operate, classifying them as intermediaries, custodians, or brokers. These rules extend existing financial sector requirements—covering customer protection, governance, security, and anti-money laundering/terrorist financing efforts—to the crypto sector. Providers must establish compliance, risk management, and cybersecurity protocols to gain authorization. Furthermore, the purchase/sale of fiat-pegged stablecoins and the use of virtual assets for international transfers will fall under foreign exchange market regulation, with transactions involving unauthorized counterparties capped at $100,000. The regulations are set to take effect in February 2026, giving companies until November 2026 to fully comply or cease operations. These measures aim to prevent fraud and money laundering, supporting Brazil's position as the dominant crypto market in Latin America.

(Source：The Block)