Brazil Takes Steps Towards Crypto Regulation: President Signs Law Granting Central Bank Oversight

Brazilian President Luiz Inácio Lula da Silva has signed legislation providing guidelines for the country’s central bank and securities regulator to regulate the crypto industry.

The new law aims to establish a legal framework for cryptocurrencies in Brazil and assign specific roles to regulatory authorities.

The recently signed government decree, No. 11.563, outlines the rules and responsibilities assigned to the Central Bank of Brazil (BCB) and the Comissão de Valores Mobiliários (CVM) regarding cryptocurrencies.

Under this law, the BCB is authorized to regulate and supervise virtual asset service providers (VASPs), ensuring that they operate in compliance with established guidelines.

Meanwhile, the CVM, which serves as Brazil’s equivalent of the Securities and Exchange Commission, will continue overseeing token projects that qualify as securities.

The new law is expected to bring clarity and stability to the crypto industry while safeguarding consumer protection and combating financial crimes.

The CVM has stated that it aims to develop a regulatory framework that effectively addresses the growing volume of cryptocurrency trades and supports emerging markets in the country.

In addition to the regulatory developments, Brazil’s central bank is making strides in the field of digital currencies.

The institution is set to initiate a pilot project for a central bank digital currency (CBDC) and has partnered with major payment firms, including Visa and Mastercard.

The primary aim of this project is to test the privacy and programmability functionalities of the CBDC platform, paving the way for a potential rollout of a digital version of Brazil’s currency, the real.