Brazil’s Central Bank (BCB) has introduced a regulatory proposal to ban platforms from allowing stablecoin withdrawals to self-custody wallets.

This initiative is part of the country’s broader effort to regulate its rapidly expanding crypto sector.

Brazil Aims to Regulate Crypto With New Stablecoin Restrictions

The regulatory draft, announced on November 29, specifically targets “tokens denominated in foreign currencies.” Under the proposal, crypto exchanges in Brazil would no longer be allowed to facilitate the transfer of these stablecoins to self-custody wallets.

“The provider of virtual asset services is prohibited from transferring virtual assets denominated in foreign currency to a self-custodial portfolio,” the proposal stated.

Further, the proposal seeks to align the treatment of crypto with existing financial instruments like foreign direct investments and external credit. Virtual asset service providers would be required to comply with international financial regulations and report client information to the central bank.

The BCB highlights the potential benefits of virtual assets, including enhanced efficiency in foreign exchange services and investment options. However, the institution also notes risks such as investor protection, cybersecurity, and financial stability.

“The adoption of [virtual assets] also raises concerns, including in cases of interconnection with traditional models, involving aspects such as consumer and investor protection, privacy, cybersecurity, prevention of use for illicit purposes, financial and market integrity, and maintenance of fiscal and macroeconomic stability,” the regulator opined.

Considering this, the BCB

Go to Source to See Full Article
Author: Oluwapelumi Adejumo