Brazil Cracks Down: Central Bank Rolls Out Tough New Crypto Rules to Fight Fraud
Brazil's financial watchdog just dropped the hammer on crypto scams. The Central Bank unveiled sweeping new regulations today—aimed squarely at bad actors exploiting the digital asset space.
Key changes include stricter KYC requirements, mandatory transaction reporting, and harsh penalties for non-compliance. 'We're protecting investors while allowing innovation to thrive,' claimed one official—though crypto traders were already grumbling about red tape.
The move comes after a 300% surge in crypto-related fraud cases last year. Ironically, the new compliance costs might squeeze smaller exchanges harder than the scammers they're trying to stop. Classic financial regulation: solving yesterday's problems at tomorrow's expense.
New Crypto Guidelines In Brazil
At a recent press conference, Gilneu Vivan, the director of regulation at the central bank, emphasized that the new regulations are designed to minimize opportunities for scams, fraud, and the misuse of VIRTUAL asset markets for money laundering.
These regulations are set to take effect in February 2026 and will encompass authorization processes for foreign-exchange and securities brokers, as well as for distributors and virtual-asset service providers.
According to the statement released on the central bank’s official website, any purchase, sale, or exchange of crypto assets pegged to fiat currencies, or most commonly known as stablecoins, will now be classified as a foreign exchange operation.
This classification also extends to international payments or transfers involving crypto assets, including transactions made to settle obligations via electronic payment methods or cards.
Furthermore, the new guidelines will enhance existing regulations on customer protection, transparency, and anti-money laundering efforts, ensuring that virtual-asset service providers adhere to the same standards as traditional financial institutions.
UK Central Bank’s Stablecoin Regime Advances
In parallel, the Bank of England announced a proposal allowing issuers of widely used stablecoins to invest up to 60% of the assets backing them in government debt. This marks a potential shift in the Bank’s approach to the sector, as it plans to implement new rules next year.
However, the Bank has also proposed capping the amount of stablecoins that individuals and businesses can hold, a move that differentiates it from the regulatory approaches being taken by the European Union (EU) and US authorities.
Sarah Breeden, the Bank of England’s deputy governor for financial stability, highlighted that the proposals represent a significant step towards establishing a stablecoin framework in the UK.
The Bank has indicated that it is open to feedback and has made adjustments to its proposals based on stakeholder input, particularly regarding the interaction between stablecoin issuers and the Bank.
Meanwhile, the Bank of England is also considering the possibility of providing central bank liquidity facilities to systemic stablecoin issuers during periods of market stress, offering a safety net if these issuers struggle to liquidate their reserve assets in the private market.
Featured image from DALL-E, chart from TradingView.com
