Olá pessoal!
Greetings from Rio de Janeiro where we are at the final day of Web Summit Rio. I’ll be hanging around the Transfero stand most of the day, so please feel free to stop by and say hi if you’re around.
For today’s episode I spoke with Tatiana Guazzelli of Pinheiro Neto Advogados and Marcos Rocha of Veirano Advogados about several important developments regarding Brazil’s forthcoming crypto regulation framework.
TLDR is that the Brazilian Central Bank’s consultative process for defining regulations is at a critical inflection point, with final rules expected to be released in the second half of 2025.
Due to proposed “grandfathering” provisions, companies planning to apply for licenses in the future without current operations in the country may find themselves waiting for a long time.
Marcos and Tatiana, who also represent the ABToken industry association, stressed the urgency for crypto businesses eyeing the Brazilian market.
Marcos explained:
"If you're willing to come to Brazil, now is the time and do it fast. Otherwise, the door will close and you will be left outside, in the cold, for two - three years, at least.”
In this context, “operations” isn’t merely having a shell company or legal entity, but rather demonstrating active operations through a Brazilian legal entity servicing local customers.
However, it’s unclear what specific evidence the regulator will ask of companies to prove that they are indeed “operating” in the country. Important considerations on this front include:
Prove genuine operations: Having a local entity with demonstrable client activity is essential for grandfathering eligibility
Choose service offerings carefully: Companies will only be grandfathered for services they can prove they were already providing when regulations take effect
Prepare for the long haul: Even grandfathered entities face a multi-phase licensing process expected to take approximately three years
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Key Regulatory Developments
Three critical public consultations have concluded: Public Consultation 109 (prudential rules for VASPs), 110 (authorization processes for VASPs), and 111 (crypto transactions in the foreign exchange market).
The Central Bank is currently digesting the commentary it received from the market during these consultations and is formulating final regulations that are now expected to be released in the second half of 2025
The market broadly welcomes regulation but is concerned about restrictions that could disadvantage Brazilian investors or create incentives for non-compliant operators
Major concerns include restrictions on Brazilian investors accessing global order books of international players, which could reduce market liquidity and increase prices
Stablecoin self-custody ban is likely to remain: Despite a myriad of objections from the market, Tatiana reckons that a controversial proposal to prohibit stablecoin transfers between self-hosted wallets is unlikely to be walked back in full, though it could be watered down
Additional Regulatory Considerations
Congress is considering separate stablecoin legislation, raising concerns about potentially conflicting regulatory frameworks
The Brazilian Securities Commission (CVM) is also working on adapting securities regulations to blockchain technology
For financial institutions and crypto businesses interested in the Brazilian crypto market, the message is clear: establish local operations now or face significant barriers to entry in the near future.
I appreciate Marcos and Tatiana joining the show to provide this timely update.
You can connect with Tatiana and Marcos on Linkedin
-AWS
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