Brazil’s central bank tightens rules in response to the cryptocurrency surge

According to the governor of Banco Central do Brasil, Brazil’s central bank,  Governor Roberto Campos Neto, a significant surge in crypto adoption in the country was sighted by the bank and the bank intends to respond to the situation by tightening the digital assets regulation. Data released from the central bank shows that from January to August 2023, imports of crypto rose by 44.2% compared with the same period in 2022.

On Sept. 27, Governor Roberto Campos Neto in his speech to the parliamentary Finance and Taxation Commission,  reported the rise of “cryptocurrency imports” by Brazilians. According to the central bank’s data, imports of crypto rose by 44.2% from January to August 2023 when compared with 2022. The total funds were about 35.9 billion Brazilian reals ($7.4 billion).

Emphasizing the popularity of stablecoins, Campos Neto in his speech, stated that stablecoins are now being used more for payments than investments. He also stated that in response to these tendencies, the bank will be tightening regulation and bringing crypto platforms under its supervision. He added that problems related to crypto could include tax evasion or illicit activities:

“We understand that a lot is connected to tax evasion or linked to illicit activities.“ 

In June 2023, a primary role in crypto regulation was handed to the Brazilian central bank. However, the token projects that qualify as securities continue to fall under the purview of the Comissão de Valores Mobiliários — Brazil’s equivalent of the United States Securities and Exchange Commission.

In August, the central bank revealed the brand and logo of the Brazilian central bank digital currency, Drex, a digital currency they’ve been working on for a while. In a previous controversy, Brazilian blockchain developer Pedro Magalhães reportedly discovered functions in the Drex code that would allow a central authority to freeze funds or reduce balances.

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