BRAZIL Trends and Developments Contributed by: Roberto Panucci Filho, Tiago Severo Pereira Gomes, Diogo Octavio Nebias and Guilherme Teles, Panucci, Severo e Nebias Advogados
The reform reshapes the traditional SCFI as SCFI 2.0, multi-product and investor friendly. It is a pivotal step in Brazil’s regulatory trajectory, coupling fintech agility with supervised finance to create one of the market’s most versatile, growth-ready platforms. VASPs and the Tokenised Future Law 14,478/2022 created Brazil’s first comprehensive statute for virtual assets and the category of VASPs, which must be licensed and supervised by the Central Bank of Brazil when engaging in intermediation, cus- tody or exchange. The purpose is clear: bring cryp- tocurrency activities inside the prudential perimeter, while preserving room for innovation. Consultation process and prudential core In late 2024, the Central Bank of Brazil issued CP 109/2024 to regulate VASPs. The draft divides VASPs into intermediaries, custodians and brokers (combined) and sets differentiated minimum capital depending on the licensing and whether leverage, margin trading or margin staking is offered. Core pru- dential and operational rules include segregation of client assets, mandatory payment accounts to sepa- rate client funds, a proof-of-reserves process, and independent audits. User protection and market integrity VASPs must provide human customer-support chan- nels, perform suitability tests for complex products, and avoid gamified features that induce excessive risk-taking. Sanctions screening and the monitoring of blacklisted wallet addresses are required, and obli- gations extend to outsourced service providers and technology vendors. Together, these measures bring cryptocurrency activity within a supervised perimeter while maintaining room for responsible innovation. Integration with the traditional system Once VASPs are licensed, financial and payment institutions will be able to partner with exchanges, custodians and tokenisation platforms under a uni- fied supervisory framework. Tokenised receivables or other assets held with a licensed custodian can more confidently be used as collateral in secured lending, and digital wallets may integrate cryptocurrency fea- tures with clearer segregation and governance, there-
by facilitating institutional participation in tokenised credit and settlements. Strategic takeaway Institutions that invest early in custody, governance and compliance will be better positioned to capture opportunities as the VASP regime enters into force and tokenisation use moves from experimentation to supervised infrastructure. Deposit‑Insurance Reform: Aligning Incentives and Restoring Discipline Brazil’s deposit insurance scheme, the FGC, insures deposits against the risk of default in the event of insolvency of the financial institution. Deposits of up to BRL250,000 per depositor per institution – with an aggregate cap of BRL1 million over a rolling four-year period – are insured. The framework has preserved retail confidence and supported funding for smaller banks; in practice, more than 99% of depositors are fully covered under current deposit insurance limits. The problem: moral hazard Over time, generous coverage encouraged some institutions to advertise above-market deposit rates while leaning on the FGC coverage, thereby dulling credit discipline. Episodes involving mid-sized players showed how guaranteed inflows could be channelled into higher-risk strategies, creating a classic moral- hazard dynamic and potential strain on the insurer if the practice is replicated system-wide. 2025 reform In August 2025, the CMN approved Resolution 5,238 (effective 1 June 2026, with phased implementation up to 2028) to recalibrate incentives, as follows. • Additional FGC contribution now applies when the reference value ( valor de referência , or VR) exceeds four times the adjusted net worth ( patrimônio líqui- do ajustado , or PLA) and 60% of reference funding ( captações de referência , or CR) (previously 75%). • The contribution multiplier was doubled from 0.01% to 0.02%. • Prudential allocation rule – when the VR exceeds six times the PLA and 80% of CR, or the VR exceeds ten times the PLA, the excess must be
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