The regulation of virtual asset service providers (VASPs) – which includes three public consultations opened by the Central Bank until February – poses challenges for companies in the sector. But it will benefit the market and investors, bringing greater security and transparency.
This assessment is by Tatiana Mello Guazzelli, partner at Pinheiro Neto Advogados. The lawyer works in corporate law, with a focus on the financial, capital and crypto markets.
Participation in BC consultations can accelerate the sector
We recommend that all our clients actively participate in the three public consultations, either directly or through associations, to build a regulatory framework that is appropriate for the market, says Tatiana.
Ensuring security for investors is one of the objectives of regulating crypto assets.
The regulation provides protection and greater security for those who want to invest in crypto assets, and should contribute to an increase in the number of investors in virtual assets, he assesses.
With a deadline for contributions until February 7, 2025, CPs 109 and 110 seek to establish the regulatory framework for VASPs. The aim is mainly to create rules for their constitution and operation, to regulate the provision of virtual asset services by other institutions authorized to operate by the Central Bank. In addition to regulating the authorization process for VASPs.
CP 111 is open for comments until February 28th, and intends to regulate the performance of VASPs in the foreign exchange market.
Provided they are authorized to operate in this market, virtual asset providers will be able to carry out a wide range of activities, including international payments or transfers through the transmission of virtual assets. Purchase, sale, exchange or custody of stablecoins denominated in reais owned by non-residents. And finally, purchase, sale, exchange, transfer or custody of stablecoins denominated in foreign currency.
Limits range from $100,000 to $500,000 per transaction
The proposal is to allow international payments or remittances to be made using only virtual assets, without the need for an exchange transaction involving fiat currencies, subject to certain restrictions, explains Tatiana. Securities Brokers (CTVMs) and Securities Distributors (DTVMs) that also provide virtual asset services will be subject to a limit of US$500,000 per international payment or transfer, while VASPs will have a limit of US$100,000 per transaction, she adds.
According to Pinheiro Neto's partner, the new regulation will bring more security for exchanges to operate in Brazil, but it also brings challenges.
Is the market prepared to meet this demand?
Providers will, for example, have to be audited, and many audits are not yet prepared to serve this market, he says.
In 2025, says Tatiana, these challenges will have to be faced, and that is why it is important for VASPs to participate in the three public consultations. Even to point out which rules are being proposed that would require more time to adapt. Or that would not be suitable for the virtual assets market.
The article BC consultations benefit crypto market, says partner at Pinheiro Neto Advogados was first seen on BeInCrypto Brasil.