Brazil's Central Bank Unveils Institutional Crypto Regulation Roadmap

The Central Bank of Brazil has taken a significant step in regulating the country's institutional crypto market by releasing draft rules for licensing and supervision. The proposal aims to strengthen oversight, close compliance gaps, and align institutional crypto activity with Brazil's broader financial supervision regime.

According to the central bank's consultation documents, institutional Virtual Asset Service Providers (VASPs) will need formal authorization to operate. Once approved, companies will have 270 days to disclose activities and demonstrate compliance with operational and reporting standards. Supervisory procedures will expand gradually between 2026 and 2027.

The proposed regulations target firms that build and operate digital asset infrastructure for banks and financial companies rather than retail traders. This includes custody, settlement, tokenization, and blockchain connections required by financial institutions. Regulators have acknowledged the challenges of oversight in this sector, emphasizing the need for tailored compliance solutions to monitor global settlements and mitigate financial crime risks.