Opposition to Central Bank Proposal
The Central Bank of Brazil’s proposal to ban the withdrawal of stablecoins to self-custody wallets is facing strong opposition from crypto exchanges. Industry leaders argue that this measure is overly harsh and could drive companies to operate outside of Brazil’s regulatory reach.
Industry Response and Alternatives
Leaders from the crypto industry, including Binance, have suggested a reporting system as a more reasonable alternative. This system could address government concerns without imposing such severe restrictions. Since the proposal’s introduction, Binance has been collaborating with regulatory officials to explore solutions that balance the central bank’s need for transaction oversight with the interests of crypto companies.
“If the central bank partners with blockchain analytics firms, they could effectively track transactions without needing to enforce a total ban,”
Thiago Sarandy, head of regulatory affairs for Binance in Brazil and El Salvador, stated.
He emphasized that this approach could enhance efforts against money laundering and tax evasion. Sarandy urged the central bank to abandon the proposed prohibition in favor of a reporting mechanism that would facilitate transaction monitoring.
Legal Concerns and Warnings
Legal expert Cesar Carvalho from Baptista Luz Advogados also criticized the ban during discussions, warning that it might infringe upon constitutional rights, particularly the right to property. He remarked:
“A total ban like this is disproportionate and very excessive… These principles are foundational to our democracy.”
Potential Impact on Crypto Exchanges
Guilherme Sacamone, head of OKEx in Brazil, cautioned that the ban could prompt exchanges to relocate their operations abroad, stating:
“You only hit those who are trying to work within the rules.”
Context and Ongoing Debate
This proposed legislation comes amid concerns voiced by Gabriel Galipolo, the president of the Central Bank of Brazil, who has linked cryptocurrency usage with illegal activities such as tax evasion and money laundering under an “opaque vision”. The proposal has ignited significant debate within the crypto community, leading to calls for more balanced regulatory measures.
