Brazil, after implementing some rules to govern cryptocurrencies back in 2022, is gearing up to unveil a more detailed regulatory framework to oversee the crypto sector. In a recent development, the Central Bank of Brazil has claimed that it would be bringing in a comprehensive set of rules to its Web3 community towards the final leg of 2024. Interestingly, Brazil succeeded India to preside over the G20 group of nations last year, where work around enforcing globally workable crypto rules is among top priority.
According to a Reuters report, the financial authorities of Brazil have decided to analyse all Web3 use cases and their possible consequences to formulate new rules in detail. Once decided, the rules will be rolled out gradually to give industry players an ample timeline to bring their businesses into compliance with them.
Without disclosing too many details about the ‘internal planning’, Brazil’s Apex bank has confirmed that laws to monitor the use of stablecoins and the role they can play in foreign exchange settlements and other payments are in the pipeline this year.
In the coming days, Brazil will be launching a consultation to get insights from the public and experts on the kind of rules that should be brought in for the Web3 sector to make it safer for the investment community. This consultation, however, will be Brazil’s second such initiative.
Back in December 2022, Brazil had mandated crypto firms operating within its territory to obtain a relevant ‘virtual service provider’ licence and to register with relevant authorities. In addition, the government there had also instructed law enforcement units to create a new category under the ‘crime of fraud’ that would deal with crypto-related financial scams.
Moving forward, Brazil reportedly aims to follow India into making virtual asset service providers adhere to anti-money laundering rules. Presently, the country is also marching ahead with its wholesale CBDC project called DREX. The nation is also presently hosting the G20 Techsprint programme.
In February this year, the Financial Stability Board (FSB), a global fintech watchdog, had said that crypto related policy formulation, asset tokenisation, and responsible handling of artificial intelligence (AI) would continue to remain key focus points for G20 under Brazil this year.
Despite finalising a crypto roadmap for G20 nations to adopt for crypto monitoring under India’s G20 presidency last year, the FSB firmly believes that more legal clarity is directly needed to regulate sensitive sectors like crypto and AI.
