New Regulatory Framework for Virtual Asset Service Providers in Brazil
The Central Bank of Brazil is set to roll out a new regulatory framework that will enforce reporting obligations for Virtual Asset Service Providers (VASPs), outlining specific data that these companies are required to disclose. Slated to come into effect in February, this regulatory initiative seeks to bring consistency to compliance practices within the rapidly evolving digital asset landscape.
Overhaul of Existing Protocols
As reported by local news outlets, the Central Bank plans to overhaul existing protocols to ensure VASPs meet these updated standards, particularly in relation to anti-money laundering obligations. Eduardo Liberato, an advisor within the central bank’s regulatory division, emphasized the importance of a systematic approach for VASPs to relay information to the Central Bank during a recent discourse at the event titled “The Future of Digital Assets in Brazil.” He noted the common challenge across all VASPs of providing orderly and organized data to the regulatory authority.
Grace Period for Cryptocurrency Businesses
In an effort to mitigate disruption within the crypto market, Liberato also announced that cryptocurrency businesses will have a grace period of nine months post-regulation implementation, allowing them to continue operations as they adapt to the new requirements.
“Companies can continue to operate normally until the end of this transitional period,”
he affirmed.
Significance of the Regulatory Move
The significance of this move extends beyond regulatory compliance; it signals the Central Bank’s commitment to adopting robust measures for the digital economy, despite potential pushback from the Brazilian legislature. Recent proposals to tax stablecoin transactions as if they were foreign currency movements have faced legislative rejection, with a new bill challenging the central bank’s authority in this domain.
Conclusion
As Brazil navigates this regulatory landscape, VASPs will be compelled to adhere to these upcoming requirements, ensuring that they are aligned with the broader goals of transparency and accountability before the Central Bank.
