Brazil Proposes Tighter Crypto Regulation to Combat Illegal Bitcoin and Stablecoin Use
Brazil’s Finance and Justice Ministries have launched a public consultation on new crypto regulation aimed at curbing illegal Bitcoin and stablecoin use. The draft proposals would require stablecoin issuers to be licensed banks or regulated entities, maintain 1:1 fiat backing, and classify stablecoins as securities. They also expand anti-money-laundering (AML) rules to cover decentralized finance (DeFi), mandate licensing for cross-border stablecoin transfers, and empower authorities to freeze suspicious accounts. Public feedback is open until early October, as regulators seek to strengthen AML measures, combat financial crime, and provide clearer legal frameworks for the cryptocurrency market.
Neutral
These proposals introduce tighter oversight and compliance requirements but also offer legal clarity for the crypto sector. Similar past AML expansions—such as the EU’s MiCA framework—ultimately reduced illicit flows without severely impacting major asset prices. In the short term, compliance costs may weigh on stablecoin issuers and platforms handling Bitcoin transactions. Over the long term, clearer rules could foster institutional confidence and stable market growth.