Brazil Strengthens Crypto Regulation with New Central Bank Rules

Brazil Strengthens Crypto Regulation with New Central Bank Rules

Brazil's central bank has rolled out a comprehensive regulatory framework for digital asset service providers, expanding anti-money laundering (AML) and counter-terrorism financing rules to cover the nation's expanding crypto sector.

Key Takeaways:

All cryptocurrency service providers in Brazil must secure authorization by November 2026.
The new regulations classify transactions involving stablecoins and cross-border cryptocurrency transfers as foreign exchange operations.
These rules aim to enhance the safety and transparency of Brazil's $319 billion crypto market.

This initiative represents a major advancement in Brazil's effort to incorporate virtual assets into its financial infrastructure while diminishing illicit activities.

Brazil Mandates Central Bank Approval for Crypto Firms by November 2026

The new regulations, announced on a recent Monday, will officially take effect in February 2026. They stipulate that virtual asset service providers (VASPs)—which include intermediaries, custodians, and brokers—must obtain approval from the central bank prior to conducting business.

This framework imposes rigorous compliance requirements concerning governance, transparency, internal controls, cybersecurity, and risk management, aligning crypto firms with the same regulatory standards as traditional financial institutions.

Companies are given until November 2026 to comply with these standards or risk halting their operations.

Under the new rules, transactions related to the purchase, sale, or exchange of fiat-pegged stablecoins will be classified as foreign exchange transactions, as will the utilization of cryptocurrencies for international transfers or settlements.

For transactions involving unauthorized counterparties, a cap of $100,000 will be applied, as stated by the central bank.

These regulations are part of Brazil's broader strategy to enhance oversight following a noted increase in stablecoin adoption, with authorities observing that these digital assets are increasingly used for payments and international transfers rather than mere investment vehicles.

“New regulations will limit opportunities for scams, fraud, and the use of virtual asset markets in money laundering,” remarked Gilneu Vivan, the bank's director of regulation, during a press briefing.

This framework builds upon Brazil's 2022 crypto law, which provided a legal foundation for virtual assets but necessitated further central bank regulations to come into effect.

With these new measures, Brazil aims to solidify its position as a frontrunner in digital finance regulation in Latin America.

According to Chainalysis, Brazil has risen to become the fifth-largest crypto market worldwide, handling nearly $319 billion in cryptocurrency transactions between mid-2024 and mid-2025, accounting for about one-third of all activity in Latin America.

The central bank expects that these updated rules will enhance the security and transparency of Brazil's rapidly expanding digital economy while aligning it with international financial norms.

Brazil Considers $19B Bitcoin Reserve Plan to Mitigate Dollar Dependence

Reports indicate that Brazil's Congress is currently deliberating the establishment of a $19 billion Bitcoin strategic reserve, known as RESBit. This initiative aims to diversify the nation's financial assets and lessen dependence on the US dollar.

The proposal, part of Bill 4501/24, was debated in a public hearing held on August 20, organized by the Economic Development Commission in Brasília.

During the discussion, lawmakers, economists, and cryptocurrency experts suggested that Bitcoin could function as a digital commodity akin to gold, offering a safeguard against inflation and geopolitical uncertainties.

Should this plan be approved, Brazil would position itself among the first major economies to officially incorporate Bitcoin into its national reserves, joining similar initiatives in countries such as El Salvador, the United States, and certain Asian nations.

The Central Bank of Brazil and the Finance Ministry would oversee the custody and management of this reserve, with mandatory biannual reports on performance and risk exposure to maintain transparency.

However, the initiative faces significant challenges, as it must navigate approval through four congressional committees, including Economic Development, Science and Technology, Finance, and Justice, before being voted on in the Senate.