Brazil authorizes its central bank to regulate crypto

Brazilian President Luiz Inácio Lula da Silva has approved a new law granting regulatory authority to the central bank of Brazil over cryptocurrency firms. This move aims to ensure the supervision and control of digital asset businesses, such as bitcoin trading platforms, centralized crypto exchanges, and wallet providers, in order to protect consumers and mitigate risks associated with digital assets. The law also clarifies that Brazil’s securities regulator, the Comissão de Valores Mobiliários (CVM), will retain its oversight of token projects classified as securities. This regulatory approach acknowledges the distinct nature of cryptocurrencies, encourages innovation, and safeguards investors’ funds.

This development aligns with Brazil’s commitment to establishing a regulatory framework for its emerging crypto industry. Furthermore, Brazil is concurrently preparing to launch its own central bank digital currency (CBDC) and plans to collaborate with Visa and Mastercard to test the functionality of its CBDC platform. This reflects the global trend of exploring digital currencies backed by central banks.

Similar efforts to regulate digital assets are underway in various jurisdictions worldwide. For instance, Ukraine has indicated its intention to adopt the European Union’s recently enacted Markets in Crypto-assets (MiCA) regulation, which aims to enhance transparency, disclosure, and authorization in the issuance and trading of cryptocurrencies. Meanwhile, the United States is grappling with regulatory challenges in its web3 ecosystem, with SEC chair Gary Gensler initiating a crackdown on market participants. Notably, lawmakers have introduced the SEC Stabilization Act, a legislation aimed at restructuring the agency and removing Gensler as its chair.

In the coming years, significant progress in crypto regulation is expected globally. Investors, policymakers, and regulators are anticipated to collaborate in order to establish frameworks that foster a safer and more inclusive crypto economy.

source