- Brazilian President Lula signs legislation to clarify roles of central bank and securities regulator in cryptocurrency regulation.
- The new law empowers the Central Bank of Brazil to regulate and supervise virtual asset service providers.
- Brazil is home to prominent crypto firms.
Brazil President Luiz Inácio Lula da Silva, commonly known as Lula, has approved new legislation outlining the responsibilities of the country’s central bank and securities regulator regarding cryptocurrencies. The government decree, numbered 11.563, was signed on June 14 and provides clarity on the legal framework for cryptocurrencies established by a previous law in December 2022.
Brazil Central bank to get new power
Under the new legislation, the Central Bank of Brazil will be granted the authority to regulate and supervise virtual asset service providers, while the Comissão de Valores Mobiliários (CVM), Brazil’s equivalent to the United States Securities and Exchange Commission, will oversee token projects that qualify as securities.
Earlier reports indicated that the CVM was working towards creating a regulatory framework that aligns with the growing volume of cryptocurrency trades in the country and emerging markets. The decree will come into effect on June 20 but will not impact existing laws on consumer protection and financial crimes.
The timing of the decree coincides with Brazil’s central bank’s plan to launch a pilot project for a central bank digital currency (CBDC) in collaboration with major payment firms, including Visa and Mastercard. The aim of the project is to test the privacy and programmability features of the CBDC platform in preparation for a potential nationwide rollout of a digital version of the Brazilian real.
Brazil, with one of the largest cryptocurrency markets in South America, is home to the prominent crypto exchange Mercado Bitcoin and has licensed foreign payment providers like Crypto.com and Bitso. In March, U.S.-based crypto exchange Coinbase announced its partnership with local firms to facilitate crypto purchases for residents of Brazil.
