ABcripto proposes adjustments to Central Bank regulations to ensure legal security and competitiveness in the crypto market.

The Brazilian Cryptoeconomics Association (ABcrypto) sent, on February 28, its contributions to the Public Consultations 109/2024, 110/2024 and 111/2024 of the Central Bank of Brazil (Bacen), which establish the basis of the regulation of virtual asset service providers (PSAVs). The entity positively evaluates the proposals, but suggests adjustments to strengthen legal security, ensure investor protection and preserve the competitiveness of Brazil in the global scenario. 

For Bernardo Srur, CEO of ABcripto, the regulation of the sector needs to balance innovation and consumer protection, without imposing excessive restrictions on companies.“ Regulatory advancement is essential to give predictability to the market and encourage long-term investments. Our priority is to ensure rules that ensure customer safety, promote innovation and position Brazil as a competitive environment for digital businesses. The Central Bank has conducted an open and technical dialogue, and we remain committed to contributing to a modern and efficient regulatory framework”, says Srur. The contributions of ABcripto have been collaboratively elaborated by its associates, led by the Central Bank GT and Taxation sector, and Sta.  

Full contributions are available at ABcripto website 

Check out the main contributions of ABcrypto to the Central Bank 

Public Consultation 109/2024 - O REGULATION of PSAVs 

• Securities segregation and risk management: Ensuring the separation of PSAV assets from customer assets is essential for market security.ABcrypto has historically defended the practice and proposed improvements in requirements. 
• Preservation of confidentiality and information security: Strengthening data protection standards is critical to ensuring that financial and personal information of customers and businesses is protected against improper access and cyber threats. 
• Clear definition of PSAV types: The regulatory proposal establishes different categories for the different agents in the sector, such as liquidity providers, intermediaries, custodians and brokerage firms, ensuring adequate rules for each operation model and avoiding disproportionate requirements. 
• Competitiveness of the national market and regulatory balance: Standards need to be compatible with international best practices and regulatory equivalents to ensure that companies maintain their sustainable development, preserving dynamics and innovation, reducing the possibility of regulatory arbitrage, without adding unnecessary controls that may compromise the competitiveness of the sector and integration with international markets. 
• Review of regulatory interconnection between different regulators: Clear delimitation of regulators' competencies is essential to avoid role overlaps and interdependency effects that could lead to regulatory gaps, legal uncertainty and delays, ensuring a more predictable and efficient business environment. 
• Adequate timeframe for regulatory adequacy: A well-structured transition period allows PSAVs to make necessary adjustments without compromising their operations, ensuring progressive adaptation to new requirements. 

Public Consultation 110/2024 DO Authorization Processes for the Operation of PSAVs 

• Efficient licensing process: The creation of an agile authorization flow proportional to the size of the companies and favors innovation in the sector. 
• Governance and compliance: Alignment of governance requirements with best practices in the financial market is essential to ensure transparency, operational soundness and efficient accountability mechanisms. 
• Structured regulatory transition: Regulation needs to be implemented gradually, allowing PSAVs to adjust their internal processes and operational structure without negative impacts to the market and investors. 
• Flexibility for companies of different sizes: Regulation should take into account the size and complexity of PSAV operations, ensuring that regulatory requirements are proportionate to their scale of operation. 

Public Consultation 111/2024 - Foreign Exchange Rules for Virtual Assets 

• Differentiation between foreign exchange transactions and transactions with virtual assets: Stablecoins and other digital assets have their own characteristics that need to be considered to avoid being automatically matched to traditional foreign exchange operations, preventing distortions in the sector. 
• Avoiding barriers to the international market: The regulation should allow Brazilian companies to act globally without restrictions that could compromise their competitiveness and innovation in the digital assets sector. 
• Self-custody and prevention of money laundering: A balance between illicit prevention and the operational viability of PSAVs should be maintained, ensuring that self-custody remains in place and that controls on different types of illicit prevention can be incorporated safely and efficiently. 
• Clarification of the role of stablecoins: Differentiation between types of stablecoins and their respective functions in the market should be incorporated into the regulation, avoiding generic restrictions that may limit their use. 
• Adaptation to market dynamics: The regulatory model must take into account the specificities of decentralization, technological innovation and globalization of the sector, ensuring that the standards are appropriate to the reality of the sector. 
• Competitiveness of the national market and integration with the global market: The revision of obligations that impact the national market is essential to preserve market liquidity and ensure that regulation does not make business models already consolidated in the global crypto asset scenario unfeasible. 
• Continuous collaboration with the Central Bank: ABcripto reinforces its commitment to work alongside the regulator to build a balanced, efficient and focused regulatory framework for the sustainable growth of the crypto economy in Brazil.