Brazil's Crypto Rules Target Trust, Cement Regional Leadership

Brazil Implements Comprehensive Crypto Rules Targeting Market Frauds

Brazil's central bank has unveiled one of Latin America's most stringent regulatory frameworks for the cryptocurrency sector, mandating banking-level oversight for digital asset firms and imposing strict limits on unapproved transactions. Effective February 2026, all virtual asset service providers (VASPs)—including exchanges, custodians, and brokers—must obtain formal authorization from the central bank to operate, with a compliance deadline extended to November 2026, Coinpedia. Companies failing to meet these requirements will be forced to exit the market, marking a pivotal shift in Brazil's approach to crypto governance, according to a report by Cryptodnes.

The new rules, outlined in Resolutions 519, 520, and 521, extend traditional financial regulations to crypto firms, requiring robust governance, cybersecurity, and anti-money laundering (AML) protocols, CoinEdition reports. Central Bank Director Gilneu Vivan emphasized that the framework aims to reduce fraud, scams, and illicit finance while aligning the sector with global standards, Yahoo Finance reports. The measures also reclassify stablecoin transactions and cross-border crypto transfers as foreign exchange operations, subjecting them to the same scrutiny as traditional currency trades, Cointelegraph notes. Transactions involving unapproved counterparties will be capped at $100,000 per transfer, a move designed to curb unregulated flows, The Block notes.

Stablecoins, which account for nearly 90% of Brazil's crypto activity, have become a focal point of the regulations. The central bank's classification of stablecoin payments under foreign exchange rules closes critical gaps in AML and transparency obligations, CoinDesk reports. Providers must now verify the ownership and source of funds for self-custody wallet transfers, even for non-cross-border transactions, CoinEdition notes. This shift reflects growing concerns over the use of stablecoins for tax evasion and illicit finance, as highlighted by President Gabriel Galipolo, Cryptonews reports.

The regulatory overhaul also introduces minimum capital requirements, with firms needing to hold at least 10.8 million reais ($2 million) in capital, depending on their business type, CoinDesk reports. While compliance costs may rise for smaller operators, regulators argue the rules will bolster investor trust and position Brazil as a regional leader in digital finance, Cryptonews reports. According to Chainalysis, Brazil's crypto market processed $319 billion in transactions between mid-2024 and mid-2025, ranking it fifth globally, Cryptonews reports.

In parallel, Brazil's Congress is debating a $19 billion Bitcoin reserve plan, RESBit, to diversify the country's financial holdings and reduce reliance on the U.S. dollar, Cryptonews reports. If approved, Brazil would join El Salvador and parts of Asia in formally adopting Bitcoin as a strategic reserve asset, Cryptonews reports.