Central Bank prepares public consultation for regulation of crypto services

Otávio Damaso, CB's director of Regulation. Photo: CB.

The Central Bank (CB) is preparing Public Consultation Notices to receive suggestions and opinions from experts and the general public on the regulation of services related to cryptos. The launch of the notices will be this semester. The regulation will include, for instance, topics such as competition and consumer and user protection.

“Furthermore, specific measures should be taken to, for example, limit the risks that accompany systems without centralised governance. As well as preventing investors from being exposed to these assets without the appropriate levels of information provision,” stated the CB in a communiqué.

The preparation of the notices includes the study of international recommendations on the matter, the crypto asset market in Brazil and abroad. There is another key point that the BC is monitoring, which is the interaction between traditional financial institutions and decentralised ones.

CB is the crypto sector regulator

Since the 20th of June, the BC has been entrusted with the task of regulating and supervising these services. The Securities Commission (CVM) will be responsible for securities crypto assets. Indeed, the BC also stated that virtual assets will create integration not just coordination with the CVM, but with more government bodies such as the Federal Revenue. This could also include others, for example, the Federal Police and the Public Ministry.

“Virtual assets utilise technology that represents a significant opportunity for innovation in the financial system. Decentralisation, reduction of trading costs, transparency gains and the integration between different types of products and services have the potential to revolutionise by increasing efficiency and financial inclusion. However, many of these innovations also bring new or expanded risks, requiring caution on the part of regulators,” said Otávio Damaso, Director of Regulation at the Central Bank.

Once the regulation comes into effect, companies operating in the market will have at least six months to comply with the rules. Experts believe that the regulation could be phased.

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