Brazil, after implementing some rules to govern cryptocurrencies in 2022, is preparing 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 will bring a comprehensive set of rules to its Web3 community by the latter part of 2024. Interestingly, Brazil succeeded India last year in the presidency of the G20 group of nations, where work on implementing globally functional crypto rules is among main priorities.
According to a Reuters report, Brazil’s financial authorities decided to analyze all Web3 usage cases and their possible consequences in order to formulate new rules in detail. Once the decision is made, the rules will be phased in to give industry players enough time to bring their businesses into line.
Without revealing too many details about the ‘internal planning’, Brazil’s apex bank confirmed that laws to oversee the use of stablecoins and the role they can play in foreign exchange settlements and other payments are in the works this year.
In the coming days, Brazil will launch a consultation to get input from the public and experts on the type of rules that should be introduced for the Web3 sector to make it safer for the investment community. However, this consultation will be Brazil’s second such initiative.
Back in December 2022, Brazil ordered crypto companies operating in its territory to obtain the relevant ‘virtual service provider’ license and to register with the relevant authorities. In addition, the government there has also directed law enforcement units to create a new category under ‘fraud crime’ to deal with crypto-related financial fraud.
Moving forward, Brazil reportedly intends to follow India in making virtual asset service providers comply with anti-money laundering rules. Currently, the country is also marching forward with its wholesale CBDC project called DREX. The country is also currently hosting the G20 Techsprint program.
In February this year, the Financial Stability Board (FSB), the global fintech watchdog, said policy formulation related to cryptocurrencies, asset tokenization and the responsible handling of artificial intelligence (AI) would remain key points of focus for the G20 under Brazil this year. year.
Despite finalizing a crypto plan for G20 countries to adopt for crypto oversight under India’s G20 chairmanship last year, the FSB strongly believes that greater legal clarity is directly needed to regulate sensitive sectors such as crypto and AI.
