Brazil Central Bank Sets Crypto Rules, Sets up to $7M Capital Bar for Firms

Brazil's central bank has introduced its most extensive crypto regulations, establishing a formal licensing regime for service providers and subjecting various crypto activities to foreign exchange and capital market rules. The framework, effective February 2, mandates that companies meet capital requirements ranging from R$10.8 million ($2 million) up to R$37.2 million, depending on the business type, which is higher than initially proposed. These rules create a new entity type, Virtual Asset Service Providers (VASPs), categorized as intermediaries, custodians, or brokerages, all requiring central bank licensing. Furthermore, the regulations bring stablecoin transactions and international crypto transfers, including those involving self-custody wallets, under Brazil’s foreign exchange controls, requiring monthly reporting starting May 4, with transaction caps of $100,000. Industry groups view the framework positively but criticize the high capital bar and tight compliance window, which could hinder competition.

(Source：CoinDesk)