Brazil’s central bank governor has called for more crypto regulation in an effort to reduce tax fraud and other negative uses of the technology.
Brazilian Central Bank Governor Roberto Campos Neto has urged for more regulation of digital assets like cryptocurrencies as their use increases.
Campos Neto voiced his worries regarding tax evasion and illegal activity associated with cryptocurrency on September 27 in a speech to Brazil’s legislative Finance and Taxation Commission.
Campos Neto mentioned in his address the 44.2% increase in “cryptocurrency imports” by Brazilians between January and August 2023, compared to the same period in 2022, based on statistics from the central bank.
So far in 2023, Brazilians have imported cryptocurrencies to the tune of 35.9 billion Brazilian reals ($7.4 billion). The BCB governor singled out the widespread acceptance of stablecoins in Brazil.
People in the country think that demand has changed toward stablecoins, which are digital currencies that are usually tied to real-world assets like the U.S. dollar. They also think that people are using cryptocurrencies more as a way to pay for things instead of just investing in them, and they added, “We know that a lot of it has to do with tax evasion or illegal activities.”
According to a decree issued on July 13 that officially handed crypto supervisory authority to the BCB, Campos Neto said that the central bank will strengthen regulation and put digital assets brokerage operations under its administration in response to the developing crypto boom.
Determining which body in Brazil should operate as a regulator for virtual assets is ultimately up to the country’s president, even if the July 13 order implements Law 14478, which was signed into law in December 2022.
Cryptocurrency projects that meet the definition of securities are regulated by the Comisso de Valores Mobiliários, the Brazilian counterpart of the U.S. Securities and Exchange Commission, while Campos Neto’s agency is obliged to license and monitor virtual asset service providers.
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