Brazilian President Luiz Inácio Lula da Silva, commonly known as Lula, has approved legislation that clarifies the roles of the country’s central bank and securities regulator concerning cryptocurrencies.
On June 14, President Lula signed government decree No. 11.563, which establishes rules based on a December 2022 law that establishes a legal framework for cryptocurrencies in Brazil. This legislation grants the Central Bank of Brazil the authority to regulate and supervise virtual asset service providers while ensuring that token projects classified as securities will continue to be overseen by the Comissão de Valores Mobiliários (CVM), Brazil’s equivalent of the United States Securities and Exchange Commission (SEC).
According to Cointelegraph Brazil, the CVM aims to create a regulatory framework that aligns with the increasing volume of crypto trading in the country and emerging markets. The decree will come into effect on June 20 without affecting existing laws related to consumer protection and financial crimes.
This decision comes at a time when Brazil’s central bank is expected to initiate a pilot project for a central bank digital currency (CBDC) in collaboration with major payment firms such as Visa and Mastercard. The bank intends to test the privacy and programmability features of its platform for a potential launch of a digital version of the Brazilian real.
As one of the largest markets in South America, Brazil is home to prominent crypto exchange Mercado Bitcoin and has granted licenses to foreign payment providers like Crypto.com and Bitso. In March, Coinbase, a U.S. crypto exchange, announced a partnership with local companies to enable Brazilian residents to purchase cryptocurrencies.
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