Brazil crypto regulatory framework coming by end of year, nation's central bank says

The Central Bank of Brazil said Monday it will unveil a regulatory framework for cryptocurrencies by the end of this year. 

Brazil’s central monetary authority said in a statement Monday that the development of its crypto regulatory framework will be divided into several phases. The staged rollout effectively delays the South American country's plans to regulate its burgeoning digital assets industry, a move that would provide much-needed clarity to token creators and virtual asset service providers (VASP).   

The Central Bank of Brazil has identified at least three steps for developing a crypto regulatory framework. Those include conducting a public consultation on rules for digital asset providers' business activities and developing and improving a complementary framework for the regulation of VASPs’ operations in Brazil. As part of the framework development process, the central bank also plans to conduct internal planning related to stablecoin regulations, according to its statement. 

While the central bank’s latest announcement signals Brazilian officials remain committed to providing regulatory clarity for digital asset providers, crypto regulations in the country seem poised to come later than previously thought. Central Bank of Brazil Director of Regulation Otavio Damaso said last year in a congressional hearing that plans for crypto regulations would be finalized by the end of this June. 

Brazil has been ramping up its push toward regulating crypto in the past two years. In 2022, the country's lawmakers passed a law granting the Central Bank of Brazil authority over digital asset regulation. Last December, banking officials launched a public consultation on the matter.