Brazil’s Central Bank Lobbies for Tighter Crypto Regulation
Brazil’s central bank wants to tighten crypto regulation.
The central bank governor said this in his recent speech in parliament.
Currently, the president decides who is appointed as the regulator. The Governor of Brazil’s central bank (Banco Central do Brasil – BCB), Roberto Campos Neto, has called for tighter digital assets regulation as crypto usage surges.Campos Neto pronounced his sentiments while addressing Brazil’s parliamentary Finance and Taxation Commission on September 27, where he raised concerns about crypto vices that have plagued the country, including tax evasion and illicit activities.The Crypto SurgeIn his speech, Campos Neto touched on the rise of “cryptocurrency imports” by Brazilians between January and August 2023, which the central bank’s data quantified as a 44.2% surge when compared to 2022’s figure within the same period.
Cumulatively, Brazilians have made cryptocurrency imports worth 35.9 billion Brazilian reals ($7.4 billion) so far in 2023. In particular, the BCB governor emphasized the popularity of stablecoins among Brazilians.
“There is a perception that local demand has shifted toward stablecoins, which are cryptocurrencies typically linked to real-world assets like the U.S. dollar, with people using cryptocurrencies more as a means of payment rather than just for investment,” Campos Neto said, adding, “We understand that a lot is connected to tax evasion or linked to illicit activities.”In response to the unfolding crypto surge, Campos Neto said that the central bank would tighten regulation and bring digital assets brokerage activities under its oversight according to a July 13 decree that formally assigned crypto supervision responsibility to the BCB.Brazil’s Crypto RegimeAlthough the July 13 decree implements Law 14478, which was assented to in December 2022, to define virtual assets and establish the principles of their regulation, the onus of choosing which agency should act as a regulator lies with Brazil’s president.
While Campos Neto’s institution is legally mandated to license and oversee virtual asset service providers, regulating cryptocurrency projects that qualify as securities falls under the Comissão de Valores Mobiliários, Brazil’s equivalent of the U.S. Securities and Exchange Commission.