Brazil signs new law Appointing Central Bank and Securities Commission as Crypto Market Watchdogs

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Key Takeaways

  • Under the decree, the Securities Commission will exercise control over assets classified as securities, while the Central Bank will establish the rules and regulations that crypto exchanges must adhere to
  • The decree is set to come into effect on June 20

According to a decree published on Wednesday, Brazil’s executive branch has officially designated the country’s Central Bank and Securities Commission as responsible entities for overseeing the cryptocurrency market. This move by the government aims to bring clarity and regulatory oversight to the rapidly growing crypto industry in the country.

Under the decree, the Securities Commission will exercise control over assets classified as securities, while the Central Bank will establish the rules and regulations that cryptocurrency exchanges must adhere to, including licensing requirements for their operation. This division of responsibilities seeks to create a comprehensive framework for the cryptocurrency sector in Brazil.

President Luiz Inácio Lula da Silva, signed legislation on June 14, providing clear roles for the Central Bank and the securities regulator in relation to cryptocurrencies. The government decree, numbered 11.563, outlines the rules in line with a law passed in December 2022 that established a legal framework for cryptocurrencies in Brazil. 

The decree is set to come into effect on June 20, although it will not affect existing laws on consumer protection and financial crimes. The issuance of this decree coincides with expectations that Brazil’s Central Bank will commence a pilot project for a central bank digital currency (CBDC) in collaboration with major payment companies, including Visa and Mastercard.

The bank aims to test the privacy and programmability features of its digital currency platform, paving the way for a potential rollout of a digital version of Brazil’s national currency, the real.

As one of the largest markets in South America, Brazil has seen notable growth in its cryptocurrency sector. The country is home to major crypto exchange Mercado Bitcoin and has licensed foreign payment providers such as Crypto.com and Bitso. In March, leading U.S. exchange Coinbase announced partnerships with local firms to enable crypto purchases for Brazilian residents.

The country also boasts a high adoption rate of stablecoins and has attracted major crypto companies and protocols, including Coinbase, Bitget, and Metamask, to establish operations within its borders.

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Saniya Raahath
Saniya Raahath

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