Central Bank of Brazil to Implement VASP Regulation by 2026
The Central Bank of Brazil has announced its plans to enforce regulations for virtual asset service providers (VASPs) by the year 2026. This move comes after extensive deliberation on defining the rules that will govern the operations of VASPs in the country. The regulatory framework aims to strike a balance between allowing freedom in the market while ensuring responsible conduct.
Nagel Paulino, a key figure in the Financial System Regulation Department of the Central Bank, highlighted the various pressures that have led to the push for VASP regulation. Entities such as the Public Prosecutor’s Office, the Federal Police, and the Central Bank itself have been advocating for a structured approach to overseeing VASPs.
Although regulations for the cryptocurrency sector were introduced in 2022, requiring VASPs to obtain approval from the central bank, a moratorium delayed the implementation of these rules. Paulino emphasized the importance of crafting regulations that are not overly restrictive but rather create a secure and proactive environment for both regulators and market participants.
One of the key objectives of the upcoming regulations is to ensure alignment with international standards to prevent any disparities that could lead to market instability. Paulino warned that if Brazil’s regulatory framework deviates significantly from global norms, it could drive businesses to relocate to jurisdictions with more favorable conditions.
Paulino expressed confidence that Brazil is poised to set a precedent in crypto asset regulation within Latin America. By engaging with international entities and fostering collaboration in the regulatory process, Brazil aims to establish a robust and harmonized framework for the crypto market.
While initial projections suggested the finalization of regulations by 2025, the unique characteristics of the local VASP ecosystem have contributed to a revised timeline of 2026. Despite the delay, the Central Bank remains committed to implementing regulations that promote transparency, security, and innovation in the crypto sector.
For more information on Brazil’s efforts to regulate crypto exchanges, refer to the article: Central Bank of Brazil Aims to Finalize Crypto Exchange Regulation by Early 2025