Brazil’s President Enacts Law for Central Bank’s Regulation of Crypto Firms

Decree Grants Central Bank Authority to Regulate and Supervise Virtual Asset Service Providers, While Securities Regulator Retains Token Oversight

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President Luiz Inácio Lula da Silva, widely known as Lula, has signed a law that brings clarity to the roles of Brazil’s central bank and securities regulator in relation to cryptocurrencies.

On June 14, President Lula signed government decree No. 11.563, which sets forth regulations based on the December 2022 law that established a legal framework for cryptocurrencies in Brazil. The decree grants the Central Bank of Brazil the authority to regulate and oversee virtual asset service providers, while ensuring that token projects classified as securities remain under the supervision of the Comissão de Valores Mobiliários (CVM), Brazil’s equivalent of the United States’ Securities and Exchange Commission.

As per the notice, the decree is set to take effect on June 20, with specific provisions that will not affect existing laws related to consumer protection and financial crimes.

Also Read: Mercado Bitcoin Crypto Exchange Brazil Granted License as a Payment Institution

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The decree coincided with the central bank of Brazil’s plans to initiate a pilot project in collaboration with prominent payments companies such as Visa and Mastercard for the development of a central bank digital currency (CBDC). The bank aims to test the platform’s privacy and programmability features as part of its preparations for the future implementation of a digital version of the Brazilian real.

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Brazil, boasting one of South America’s largest markets, is a hub for cryptocurrency activities, hosting prominent exchanges like Mercado Bitcoin. The country has also granted licenses to foreign payment providers like Crypto.com and Bitso. In March, leading U.S. crypto exchange Coinbase announced partnerships with local firms, enabling Brazilian residents to make cryptocurrency purchases.

Also Read: Brazil Grants Payment Institution Approval to Binance, Leading Cryptocurrency Provider

Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.

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