The legal treatment of crypto or virtual assets in Brazil may vary according to the characteristics of each asset. Stablecoins and cryptocurrencies are generally subject to Brazilian Federal Law No. 14,478, of December 21, 2022, which deals with the regulation of virtual asset service providers (VASP), unless they have any feature that could classify it as a security under Brazilian law.
Law 14,478/2022, as regulated by Decree No. 11,563/2023, empowers the Central Bank of Brazil to authorize, regulate and supervise VASPs, which will require prior regulatory authorization by the Central Bank to operate in Brazil. VASPs already operating in Brazil before the new regulation comes into effect will be grandfathered into a transitional regime that will allow those VASPs to continue operating while applying for a license with the Central Bank.
VASP is defined by Law No. 14,478/2022 as the legal entity that performs, on behalf of third parties, at least one of the following services: (i) exchange between virtual assets and national or foreign currency; (ii) exchange between one or more virtual assets; (iii) transfer of virtual assets; (iv) custody or administration of virtual assets or instruments that enable control over virtual assets; or (v) participation in financial services and provision of services related to the offering by an issuer or sale of virtual assets.
A virtual asset, in turn, is defined as the digital representation of value that can be traded or transferred by electronic means and used for making payments or for investment purposes, not including (i) national and foreign currency; (ii) electronic money, as defined by Law No. 12,865/2013; (iii) instruments that provide their holder access to specified products or services or benefits derived from those products or services, such as points and rewards from loyalty programs; and (iv) representations of assets whose issuance, registration, trading, or settlement is provided for by law or regulation, such as securities and financial assets.
Central Bank has been working on new regulations that will be divided into phases. In a statement published in May 2024, the Central Bank presented the following steps for regulating the provision of virtual asset services in the country: (i) the development of general rules for the operation of virtual asset service providers; (ii) the establishment of internal planning regarding the regulation of stablecoins, especially within the Central Bank’s areas of competence over payments and the foreign exchange market; and (iii) the development and improvement of the additional framework to accommodate the VASPs (for example, operations in the foreign exchange market, prudential regulation, provision of information to the Central Bank, accounting, fees, suitability, among others).
Public Consultations No. 109, 110, and 111, launched by the Central Bank in November 2024, address part of these steps. The rules submitted for public consultation mainly revolve around a new license for VASPs, their obligations, and the use of virtual assets in the foreign exchange market. The Central Bank is not yet directly regulating the issuance of stablecoins. Therefore, at this moment, stablecoin issuers will not require Central Bank’s authorization and may operate as non-regulated liquidity providers to VASPs in Brazil, except if the issuer itself also acts as an intermediary or custodian of stablecoins for Brazilian clients. The activities of intermediation/distribution and custody of stablecoins are already the subject of the new proposed rules.
The new rules being drafted by the Central Bank, which are expected to be finalized and published by the end of 2025, will impact the use of stablecoins in Brazil in different ways. Among other rules, Public Consultation No. 109 proposes specific selection criteria for stablecoins and other rules related to their custody, purchase and sale. For instance, the new proposed rules are expected to consider as stablecoins only those that have as reserve assets fiat currency and/or government bonds, and the offering in Brazil of algorithmic stablecoins is expected to be prohibited.
The use of stablecoins in Brazil should also be significantly impacted by the new foreign exchange rules proposed through Public Consultation No. 111, which seeks to regulate the use of virtual assets in the foreign exchange market. Among other innovations, the regulation submitted for public consultation establishes the possibility for virtual assets, including stablecoins, to be used for international payment or transfer purposes upon the registration of the transmission of the asset with the Central Bank.
Lastly, there are several bills of law being discussed in the Brazilian Congress that may impact the use of stablecoins in Brazil. In particular, Bill of Law No. 4,308/2024 (BoL 4,308/2024) proposes issuance requirements for stablecoins, imposes transparency obligations, and introduces compliance measures for cybersecurity and financial crime prevention related to stablecoins.
Among other requirements, BoL 4,308/2024 proposes that only institutions authorized by the Central Bank to operate in the foreign exchange market are allowed to issue stablecoins pegged to foreign currency and that issuers undergo quarterly audits by independent auditors registered with the CVM (Brazilian SEC). On February 19, 2025, BoL 4,308/2024 was received by the Committee of Science, Technology and Innovation of the Brazilian House of Representatives and is currently awaiting a rapporteur in order to be analyzed and further discussed.
Bruno Balduccini
Partner at Pinheiro Neto Advogados
Tatiana Mello Guazzelli
Partner at Pinheiro Neto Advogados