Central Bank of Brazil Aims to Finalize Crypto Regulations This Year
The Central Bank of Brazil outlined its crypto regulation calendar, defining a three-phase process for finalizing these tasks in 2024. The bank aims to consult market actors regarding VASPs, establish plans to regulate stablecoins and finalize the rules to welcome VASPs into the country later this year.
Central Bank of Brazil to Finalize VASPs and Stablecoin Crypto Regulation in 2024
The Central Bank of Brazil has recently released its cryptocurrency regulation plan for this year, reporting on the next steps it will take to give virtual assets service providers (VASPs) and stablecoins regulatory clarity in the country.
According to local reports, the institution disclosed a plan to advance the processes to finalize cryptocurrency-related proposals by year’s end. The plan includes three phases: The first consists of a public consultation on the general standards VASPs should follow to be authorized to conduct operations on Brazilian soil.
This would be a follow-up to the first public consultation process the bank launched in December, seeking the input of cryptocurrency actors regarding asset segregation, risk management, activities developed, and virtual assets traded by VASPs.
The second phase will include an internal planning of the processes leading to the regulation of stablecoins, focusing on the payments and foreign exchange areas. Stablecoins, cryptocurrencies whose value is pegged to the value of another asset, have dominated the market in Brazil, surpassing traditional crypto assets such as Bitcoin.
Finally, the third phase entails finalizing the rules for accepting VASPs into the Brazilian market. The central bank was given the faculties to approve VASPs’ operation in the country by the cryptocurrency law signed into law by former Brazilian President Jair Bolsonaro in December 2022.
For the bank, the operation of these assets must be regulated to avoid bringing any possible harm to the national financial system. This includes the application of anti-money laundering and combating the financing of terrorism (AML/CFT) measures, and also the monitoring of suspicious activity derived from these service providers.
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