Late last year the Banco Central do Brasil launched a consultation relating to cryptocurrency, cross border payments and foreign exchange (FX). It proposed only to allow authorized virtual asset service providers (VASPs) to execute cross border payments and block self hosted wallet transactions. At an event last week, the central bank’s Eduardo Nogueira Liberato de Sousa indicated that these plans will likely be relaxed, according to Valor Econômico.
“As we realize that service providers can monitor the quality of self custody clients, we see room for flexibility. The important thing is to hold the institution accountable for getting to know the client who uses self custody,” he said. This is similar to the approach taken in Europe.
Beyond custody, currently Brazilian law prohibits the use of foreign currencies for domestic payments and the intention was to explicitly apply that to stablecoins. “We are evaluating whether this prohibition makes sense. Especially in cases where the transaction takes place between self custody wallets of residents and the price is set in reais. The question is whether this should, in fact, be classified as a foreign exchange transaction,” said Mr de Sousa, according to BlockTrends.
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