Brazil central bank adopts stricter crypto capital rules

Brazil's Central Bank has approved a new set of prudential rules that will require cryptocurrency platforms to meet stricter capital, risk management, and disclosure standards, effectively aligning them with the regulations governing traditional securities brokers. The measures, finalized on July 1, will take effect on January 1, 2027, following a transition period for companies to adjust.

The rules target virtual asset service providers, known as SPSAVs, which offer services such as cryptocurrency brokerage, custody, and client transfers. These firms will now be classified as Type 3 institutions, a category that includes securities brokers and distributors. The Central Bank stated that this classification follows the principle that activities with similar financial risks should be subject to similar regulatory oversight. This change will compel crypto platforms to enhance their governance, maintain minimum capital reserves against losses, implement formal risk management policies, and submit regular reports on their financial and operational condition.

A further component of the framework mandates that all virtual asset service providers be placed in Segment 4 of the banking...