BRASILIA (Reuters) -Brazil’s central bank on Monday released long-awaited rules for trading virtual assets, including cryptocurrencies, that will extend existing rules against money laundering and terrorism financing to virtual-asset service providers. Latin America’s largest economy approved a legal framework for cryptocurrencies in 2022, but its rollout hinged on complementary regulation from the central bank, which […]
Science
Brazil central bank tightens rules for virtual assets, cryptocurrency
Audio By Carbonatix
BRASILIA (Reuters) -Brazil’s central bank on Monday released long-awaited rules for trading virtual assets, including cryptocurrencies, that will extend existing rules against money laundering and terrorism financing to virtual-asset service providers.
Latin America’s largest economy approved a legal framework for cryptocurrencies in 2022, but its rollout hinged on complementary regulation from the central bank, which later held four public consultations on the matter.
Meanwhile, crypto use has surged, prompting central bank governor Gabriel Galipolo to raise concerns over the growing use of stablecoins, pegged to real-world assets like the U.S. dollar, often linked to illicit activity.
“New rules will reduce the scope for scams, fraud, and the use of virtual asset markets for money laundering,” the central bank’s director of regulation Gilneu Vivan said at a press conference.
NEW RULES TO COME INTO EFFECT IN FEBRUARY
Effective February, the regulations will cover authorization processes for foreign-exchange and securities brokers, distributors, and virtual-asset service providers, according to a statement on the central bank’s website.
Policymakers have said that stablecoins, which are less volatile than cryptocurrencies such as bitcoin, are used more for payments than investments, with many users seeking to bypass more heavily supervised and taxed traditional payment systems.
Under the new rules, any purchase, sale or exchange of virtual assets pegged to fiat currency will be considered a foreign exchange operation.
The same classification applies to international payments or transfers using virtual assets, including those made to settle obligations via cards or other electronic payment methods.
The regulation also extends existing rules on customer protection, transparency, anti-money-laundering and counter-terrorism financing to virtual-asset service providers, the central bank said.
It added that the framework includes governance and security requirements, internal controls, reporting duties and other compliance obligations.
(Reporting by Marcela Ayres; Editing by Toby Chopra and Conor Humphries)