BRAZIL Law and Practice Contributed by: Thomas Gibello Gatti Magalhães, André Dágola Brostoline and Luisa Grespan Danhoni Neves, Magalhães & Zettel
the registration and deposit of financial assets. In addition, Brazil will seek to implement the international accounting standards of IFRS 9, a standard that introduces new requirements for measuring the deterioration of financial assets, as well as a new model for classifying and meas - uring these assets. It should also be noted that BCB has been devel - oping the Central Bank Digital Currency (CBDC) called DREX since August 2020, with the pur - pose of increasing the efficiency of the payment market, promoting competition and financially including the population poorly served by bank - ing services. DREX will be issued exclusively by BCB and operated in a Distributed Ledger Tech - nology (DLT) ecosystem, facilitating transactions with tokenised digital assets. Since March 2023, BCB has been conducting the DREX Pilot, a test phase of the Brazilian CBDC, together with more than 100 financial institutions and the National Treasury Office. At this stage, features such as privacy and programmability are tested, focused on transactions involving federal government bonds. Currently, the DREX Pilot continues to run, with simulations of wholesale and retail transactions, including the purchase and sale of government bonds and smart contracts. However, all test - ing still takes place in a controlled environment, and BCB has not yet set a date for the second phase, which will involve testing with the general population. Regarding PSAVs, it is important to note that Law No 14,478/2022 (known as the Legal Framework for Virtual Assets) established guidelines to regu - late these assets in Brazil, designating BCB as
being responsible for regulating crypto-assets and related service providers, except when these assets are considered securities, which would be the responsibility of CVM. Crypto-economy service providers, known as VASPs, cover activities such as the exchange and custody of virtual assets and need prior approval from BCB to operate, including corpo - rate and position authorisations. The legislation also allows already regulated financial institutions to act as VASPs, integrat - ing crypto-economy into the traditional financial system. BCB, in collaboration with the market, is in the process of regulating these activities, with normative proposals expected by the end of 2024. Finally, it should be noted that, with the growing popularity of betting in Brazil, through bookmak - ers known as “Bets”, Law No 14,790/23 was cre - ated to regulate this market, protect consumers and promote the sustainable development of the sector. This law also determined that only institu - tions authorised by BCB can offer financial ser - vices to bettors, such as accounts for deposits and withdrawals. Accordingly, companies that process payments for bettors and bookmak - ers are now subject to BCB regulation, which includes requirements such as risk management and anti-money laundering policies. Thus, Agenda BC# for 2024 demonstrates BCB’s commitment to regulatory modernisa - tion, the promotion of sustainability and financial inclusion, seeking to ensure the soundness and transparency of the financial system, as well as its adaptation to the new demands of the global and digital markets.
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