Regulation
Brazil Central Bank Announces Phased Approach to Crypto Regulation
Brazil’s central bank revealed on Monday that it will implement a phased approach to regulating cryptoassets and virtual asset service providers, with detailed regulatory proposals expected by the end of 2024. This new timeline marks a change from the original completion target set for June. 2024, after the legislative work posed by a law of 2022.
In a statement to Reuters, the central bank explained that the decision to extend the regulatory deadline comes after careful consideration of comments collected during a public consultation held between December 2023 and January 2024. This first consultation aimed to collect broad societal comments and address issues not fully covered by the 2022. legislation, such as the segregation of assets held by virtual asset service providers.
“The first public consultation was crucial in resolving various issues and required significant efforts from our regulatory teams,” the central bank noted. “The diverse nature of activities and organizational structures within the virtual assets industry necessitated this preliminary step.”
The central bank’s regulatory director, Otavio Damaso, initially projected during a congressional hearing last year that the regulatory process would be finalized by mid-2024. However, the complexity of the sector and the numerous feedback received prompted the bank to review its schedule.
Related: Brazilian President Signs Bill Creating Crypto Regulations
The central bank announced that a second public consultation would begin in the second half of this year, focusing on the drafting of regulatory texts. “This next phase aims to use initial contributions to build a comprehensive regulatory framework, once again incorporating broad societal support,” the central bank said.
This phased approach underlines the central bank’s commitment to creating a robust and inclusive regulatory environment for crypto-assets, balancing innovation and necessary oversight. The upcoming consultation will be key to shaping the final regulations, ensuring they respond to the unique challenges and opportunities presented by the rapidly evolving virtual assets landscape.
Source: Reuters