Brazil's Central Bank introduces new crypto regulations, mandating licensed operation for service providers and including them under stablecoin regulation.

Brazil’s Central Bank issued Resolution No. 249/2025 on November 11, extending the comprehensive regulatory framework of traditional finance to cryptocurrency service providers, requiring Virtual Asset Service Providers (VASPs) to obtain central bank authorization before operating. The new rules categorize service providers into three types: intermediaries, custodians, and brokers, enforcing requirements such as customer protection, anti-money laundering (AML), and cybersecurity. Additionally, stablecoin trading is incorporated into foreign exchange market regulation.

The regulation will officially take effect in February 2026, with a 9-month transition period ending in November 2026. Non-compliant entities must cease operations. Brazil ranks fifth in Chainalysis’s 2025 Global Crypto Adoption Index, having received $318.8 billion in crypto value over the past year.

Key Features of the Regulatory Framework

Brazil’s constructed regulatory system exhibits three main characteristics: comprehensiveness, tiered structure, and forward-looking approach. Comprehensiveness covers all virtual asset service activities—including trading, custody, transfers, and payments—leaving no regulatory gaps. The tiered structure classifies licenses into three categories based on business risk: Virtual Asset Intermediaries (highest risk), Custodians (medium risk), and Brokers (basic risk), with corresponding capital and compliance requirements. The forward-looking aspect notably includes fiat-backed stablecoins within the foreign exchange management framework, recognizing their cross-border payment utility.

Specific compliance requirements include: all service providers must establish KYC systems; transactions exceeding 10,000 reais (about $1,800) require enhanced due diligence; transactions with unlicensed counterparties are limited to $100,000; mandatory cybersecurity insurance with minimum coverage scaled to business size; and the appointment of an independent compliance officer reporting directly to the board. Central Bank Supervisor Gilnew Vivan emphasized: “The core goal of the new regulation is to prevent crypto-related scams, fraud, and money laundering, while protecting consumers and maintaining financial stability.”

Market Impact and Industry Response

As Latin America’s largest crypto market, Brazil’s new regulation will reshape industry dynamics. Short-term pain is inevitable: approximately 30% of the 380 local crypto service providers may exit due to high compliance costs, especially small exchanges and payment platforms. In the long run, compliance giants are poised to benefit: leading platforms like Mercado Bitcoin (with 3.8 million users) and Foxbit have initiated capital increases, signaling a wave of mergers and acquisitions.

Cross-border operations will be particularly affected. The regulation explicitly requires foreign service providers to establish local entities and obtain licenses; otherwise, Brazil’s banks cannot provide fiat channels. This directly addresses the May 2024 incident when Banco Central suspended Binance’s operations due to lack of local compliance infrastructure. Stablecoin regulation is notably innovative: issuers like USDT and USDC must submit reserve proof, and transactions are integrated into the foreign exchange reporting system, making Brazil the first emerging market to fully foreign exchange-stabilize stablecoins.

Key Points of Brazil’s Crypto Regulation

License Categories

• Virtual Asset Intermediaries: comprehensive license (trading + custody)
• Custodians: pure custody services
• Brokers: order matching only

Compliance Timeline

• February 2026: regulation takes effect
• November 2026: compliance deadline
• Transition period: 9 months

Market Data

• Crypto users: 12 million (8% of adult population)
• Annual trading volume: $318.8 billion
• Stablecoin share: 90% (Central Bank 2025 report)

Global Regulatory Trends and Brazil’s Position

Brazil’s regulatory evolution reflects a common approach among emerging markets: avoiding outright bans like China, and steering clear of laissez-faire policies. Instead, it adopts a controlled innovation model through licensing. This approach echoes the EU’s MiCA regulation and Japan’s Payment Services Act but emphasizes local features: direct regulation by the Central Bank (not securities regulators), recognition of Bitcoin as a commodity rather than a security, and dedicated crypto settlement channels for sectors like agriculture exports.

In February 2025, Central Bank Governor Gabriel Galipolo revealed that 90% of domestic crypto activity involves stablecoins, mainly used for cross-border trade settlement and inflation hedging. This pragmatic focus shifts regulation toward payment functions rather than speculation. Chainalysis Latin America head noted: “While Latin America’s crypto policies often lag in adoption, Brazil is among the few countries to implement substantive regulation. As we move toward a more regulated environment by the end of 2025, Brazil is expected to maintain a leading role, supported by strong institutional interest.”

Investment Opportunities and Risks

The new regulation clarifies investment directions: compliance service providers, RegTech firms, and banking collaboration platforms will benefit directly. For example, Mercado Bitcoin’s valuation may be reassessed, with a projected 2025 price-to-sales ratio of only 1.8, well below the global average of 4.2; cybersecurity firms like Padtec and Unico will see policy-driven demand, with expected CAGR of 35% over three years; traditional banks like Itaú and Bradesco could develop new revenue streams through custody services.

Risks include: increased compliance costs potentially raising service fees by 15-20%, which may dampen retail participation; regulatory details remain uncertain, especially regarding DeFi and NFTs classifications; and global regulatory coordination challenges—such as the U.S. classifying certain tokens as securities—could trigger ripple effects in Brazil. Investors are advised to adopt a dual strategy: mainly invest in licensed platform equities, and allocate a small portion to Brazil-focused crypto ETFs like HASH11 to diversify individual project risks.

Conclusion

Brazil’s Central Bank regulation marks a significant milestone as the world’s fifth-largest crypto market enters a new phase of regulated development. By integrating traditional financial oversight with digital asset features, Brazil not only aims to create a safer environment for domestic users but also offers a replicable regulatory model for emerging markets. As clarity in compliance pathways emerges, Brazil is poised to attract more global capital and accelerate its transformation from a “crypto adopter” to a “crypto innovator.”