Brazil's Central Bank Empowered as Crypto Regulator by President Lula

Brazil's Central Bank Empowered as Crypto Regulator by President Lula

Brazil's President, Luiz Inácio Lula da Silva, has granted regulatory authority over the country's cryptocurrency sector to the central bank. Starting on June 20, the bank will be responsible for determining which firms can operate in the local crypto market. Additionally, it will collaborate with Brazil's Securities and Exchange Commission (CVM) to oversee cryptocurrencies classified as securities.

President Lula recently signed a decree that empowers Banco Central do Brasil to regulate the domestic cryptocurrency industry. Companies seeking to provide digital asset services will need permission from the bank, which will introduce a licensing system for crypto providers. The central bank's oversight will include monitoring compliance with anti-money laundering measures and investigating potential connections to criminal activities such as terrorism financing.

The regulatory process will involve the participation of Brazil's SEC, which will work together with Banco Central do Brasil to supervise cryptocurrencies classified as securities. However, the existing law does not clearly define which digital assets fall under this category and which are considered commodities.

In the midst of these regulatory developments, major cryptocurrency exchanges Binance and Coinbase have made their expansion efforts in Brazil. Binance partnered with Mastercard to introduce a prepaid card in the region, aiming to bridge the gap between traditional finance and crypto. Coinbase, on the other hand, collaborated with Brazil's settlement system Pix, allowing users to purchase digital assets using Brazilian reals and facilitating withdrawals and deposits in the country's national currency.

As Brazil strengthens its regulatory framework for cryptocurrencies, these developments indicate growing interest and activity in the country's crypto market.

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