Brazil's New Crypto Rules: What You Need to Know

Brazil is stepping up its game in the crypto world.

The central bank has just rolled out new rules for trading virtual assets, including cryptocurrencies. These rules aim to tackle money laundering and terrorism financing, extending existing regulations to virtual-asset service providers.

Crypto Boom in Brazil

Crypto has been booming in Brazil, and the central bank is taking notice. Governor Gabriel Galipolo has expressed concerns about the rise of stablecoins, which are often linked to shady activities. The new rules are set to kick in next February and will cover a wide range of services, from foreign-exchange brokers to virtual-asset service providers.

Stablecoins Under Scrutiny

Stablecoins, which are less volatile than other cryptocurrencies, are popular for payments. Many users prefer them to traditional payment systems because they are less supervised and taxed. Under the new rules, any purchase, sale, or exchange of virtual assets pegged to fiat currency will be treated as a foreign exchange operation.

Stricter Compliance Requirements

The regulations also extend customer protection, transparency, anti-money-laundering, and counter-terrorism financing rules to virtual-asset service providers. This means stricter governance, security requirements, internal controls, reporting duties, and other compliance obligations.

Reducing Scams and Fraud

The central bank's director of regulation, Gilneu Vivan, stated that these new rules will help reduce scams, fraud, and the use of virtual asset markets for money laundering. This is a big step for Brazil, as it continues to navigate the complex world of digital currencies.