O Banco Central (BC) started this Friday (29) a public consultation to deal with the regulation of the activity of virtual asset service providers, called PSAVsin the foreign exchange market. The monetary authority will keep the channel open for proposals until February 28, 2025.
The objective of the proposal, says the BC, is to provide greater legal certainty for the provision of these services and increase the competitiveness and efficiency of the foreign exchange market “through the application of regulation proportional to the risk of activities”.
One of the assets that should be most impacted by regulation are stablecoins, cryptocurrencies which are paired with other assets, usually the dollar. These currencies are widely used for international payments, as they have the same face value as the original currency, and are currently the most traded in Brazilaccording to data from Federal Revenue.
The proposed regulation separates the activities of PSAVs into three segments:
- payment and international transfers through the transmission of virtual assets;
- exchange or custody of virtual assets denominated in reais by non-resident clients;
- and operations with virtual assets in foreign currency, which are basically stablecoins.
The Central Bank proposal intends to determine new rules on how virtual assets can be used by foreigners in reais (R$), and limited transfers of virtual assets in foreign currency between Brazilians only to situations already legally permitted for payments in foreign currency.
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The proposal provides that operations involving investments in international capital through virtual assets must follow the same standards as investments made by other means. Furthermore, the text proposes that all external credit operations, foreign direct investment and Brazilian capital abroad that involve virtual assets must be subject to regulation.
“As expected, the regulatory proposal makes it clear that the provision of virtual asset services for international payments, as well as the purchase and sale of stablecoins by foreigners and residents, is indeed within the scope of the foreign exchange market”, he assesses. Tatiana Mello Guazzelli, partner in the corporate area of Pinheiro Neto Advogados.
Impact on stablecoins
With the proposal, companies that operate with stablecoins will only be able to trade these assets if they are authorized to operate in the exchange market.
“Institutions authorized to operate in the foreign exchange market that also have authorization to provide these services, in accordance with future regulations, may provide virtual asset services in the foreign exchange market”, says the text proposed by the BC.
According to Guazzelli, PSAVs that are authorized in the exchange market will be able to operate real stablecoins for non-residents, or foreign currency stablecoins for residents.
“PSAVs that are already operating will need to apply for authorization, also with a license to operate in the foreign exchange market so that they can carry out these activities, and those that are already in operation will have the acquired right to continue offering negotiations ”, he explains.
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Among the articles, the BC also proposes a ban on withdrawals of stablecoins to self-custodial digital wallets. In practice, anyone who buys stablecoins on an exchange will not be able to transfer them to their own wallet, like MetaMask, for example.
As a result, the proposal could end up inhibiting operations with stablecoins in Brazil or causing investors to look for other ways to carry out transfers, using, for example, only their own wallets and direct transactions between users (P2P).
