BRAZIL Law and Practice Contributed by: Eduardo Castro, Pedro Nasi and Gabriel Libanori, Machado, Meyer, Sendacz e Opice
• the total amount of operações de conta margem does not exceed the net equity of the institution in case it is a CTVM or DTVM. 10.8 Cryptocurrency Derivatives Cryptocurrency derivatives are not specifically regu - lated. They fall under the general regulation of deriva - tives, which are securities, and require prior registra - tion before they can be issued and publicly distributed. 10.9 Decentralised Finance (DeFi) No specific rules about DeFi are in place in Brazil. DeFi projects have previously been submitted to regulatory sandboxes, but no rules have been issued. 10.10 Regulation of Funds Funds that hold crypto-assets in their portfolios are subject to the regime applicable to “financial invest - ment funds” under Annex I of CVM Resolution No 175/2022, which encompasses multimarket, foreign exchange, equity and fixed-income funds. Subject to certain limitations and requirements, these funds may hold crypto-assets in their portfolios if such assets are traded on venues operated by a VASP duly authorised to operate in Brazil – or, if abroad, by a foreign supervisory authority competent to oversee the VASP’s operation and, in particular, enforce AML/ CFT and market integrity rules. Non-financial funds are only allowed to hold crypto-assets insofar as they represent another financial asset – that is, a tokenised asset. 10.11 Virtual Currencies When analysing the Brazilian regulatory framework, it is important to differentiate electronic currency from virtual assets. Electronic currency is the digital repre - sentation of fiduciary Brazilian currency, while virtual assets are blockchain assets, as defined in 10.3 Clas- sification of Blockchain Assets . Stablecoins backed by fiduciary currency are included in the concept of
protection laws, tax law and capital markets regulation where they resemble securities, investment contracts or collective investment schemes under CVM over - sight. 10.13 Stablecoins Stablecoins are defined by BCB Resolution No 520 as “virtual assets backed by reserve assets created for the purpose of maintaining their value linked to the value of a reference fiat currency”. As such, the Bra - zilian regulatory framework accepts only stablecoins backed by fiat currencies. Algorithmic stablecoins are specifically prohibited. Pursuant to BCB Resolution No 521, the purchase, sale and exchange of stablecoins are all operations related to foreign exchange markets and require the intermediation of an institution authorised to operate in foreign crypto-exchange markets. Open banking, initially launched by the BCB in 2020, has since evolved into “open finance”, a broader framework that encompasses data sharing and ser - vice integration models beyond banking and pay - ments to also include investment, insurance, pension and foreign exchange products. Open finance is primarily regulated by Joint Reso - lution No 1/20, as amended. Under this framework, electronic currency issuers and providers of payment and deposit accounts are required to participate in open finance, at a minimum by enabling the sharing of data for payment initiation services. Participation obligations include adhering to technical standards, governance rules, data sharing protocols and cyber - security requirements established by the BCB and the open finance governance structure. The regulatory architecture is structured around three core pillars: 11. Open Banking 11.1 Regulation of Open Banking • consumer consent, ensuring that customers retain full control over how their financial data is accessed and shared;
virtual assets. 10.12 NFTs
NFTs in Brazil are not subject to a standalone statutory regime, but may fall under existing legal and regulatory frameworks depending on their functional characteris - tics. NFTs must comply with copyright and consumer
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