BRAZIL Trends and Developments Contributed by: Vanêssa Fialdini, Mariana de Azevedo Mendonça and Jorge Augusto de Holanda Souza, Fialdini Advogados
rules from the Securities and Exchange Commission of Brazil ( Comissão de Valores Mobiliários – CVM). This additional layer of regulation should not be read as an attempt to prohibit virtual assets in Brazil. On the contrary, it confirms that the Brazilian regulatory approach is one of institutionalisation. Virtual assets are being brought closer to the regulated financial system, with a particular focus on financial integrity, consumer protection, operational resilience and reg- ulatory accountability. The practical consequence is that crypto businesses that were previously structured as technology companies, offshore platforms or lightly regulated intermediaries will now need to operate with a regulatory mindset similar to that expected from financial institutions and payment institutions. This scenario is particularly relevant due to how sig- nificant the Brazilian crypto market is in Latin America. Stablecoins, in particular, have become central to the local debate. They are used not only as investment or trading instruments, but also as tools for payments, treasury management and cross-border transfers. This has drawn the attention of the Central Bank, the Federal Revenue Service and policymakers con- cerned with money laundering, tax avoidance, regu- latory arbitrage and the circumvention of regulated foreign exchange channels. Against this background, the intent of the Brazilian legal framework is clear: crypto-asset activity is no longer being treated as a peripheral or experimental market, but a part of the regulated financial and pay- ments ecosystem. Operating as a licensed institution One key innovation introduced by BCB Resolutions No 519 and 520 is the creation of a licensing regime for VASPs. The new rules move Brazil away from a model in which Brazilian and foreign crypto exchang- es and custodians could operate based primarily on general corporate, tax and AML rules, and toward a model that requires prior regulatory authorisation. The framework distinguishes the different types of activities that can be provided by a VASP into three modalities: intermediation, custody and brokerage, which combines the intermediation and custody
activities. The distinction is important as it recognises that not all VASP providers are subject to the same risk profile and brings relevant impact including to the minimum capital requirements applicable to the institution. The regulation also introduces formal procedures related to obtaining a licence. BCB Resolution No 519 establishes requirements such as the suitability and capacity of controllers, the viability of the business plan, technology and governance arrangements, and the reputation and qualifications of managers. Mean- while, BCB Normative Instruction No 704 provides the documents and forms required for licensing and other authorisation-based procedures, such as changes to the institution corporate structure or control, the appointment of statutory officers and increases or decreases to its share capital. The requirements and procedures related to these authorisation processes are closely similar to the ones applicable to financial institutions and other institutions subject to the Central Bank supervision, a fact that further demonstrates the authority’s stance regarding the legitimacy and importance of VASPs within the financial and payment systems. The normative also contemplates companies that already provided virtual asset services prior to 2 February 2026, providing a transition period during which they must alter their structure and operations to comply with the framework. These pre-existing VASPs may continue their operations until they conclude their authorisation process, provided they file the applica- tion by 30 October 2026, 270 days following the entry into force of BCB Resolution No 520. A special licensing procedure was designed for these pre-existing VASPs, divided into two phases. During phase 1, entities must provide proof of their operations prior to 2 February 2026 and comply with require- ments related to the identity of their statutory officers and controllers and their corporate object. Then, dur- ing phase 2, which entities must file within 60 days from their phase 1 approval, the Central Bank shall analyse their compliance with all remaining require- ments, which include the business model’s financial and technical viability, an appropriate risk manage-
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