The Central Bank of Brazil has formally incorporated Virtual Asset Service Providers (VASPs) into its supervisory framework. Announced recently, the central bank will implement Law No. 14.478/2022. This new crypto regulation by the Central Bank of Brazil establishes strict prudential requirements, including a capital threshold of up to $7 million (approximately R$35 million) for certain activities.
This regulatory measure will directly impact exchanges, custodians, and other intermediaries in the sector. The main objective stated by the monetary authority is to reduce operational risks and anti-money laundering (AML/CFT). The implementation of the law, approved in October 2023, will be gradual. However, it represents a key operational change and an increase in compliance costs for operating in the Brazilian market.
The new regulation reclassifies operations involving crypto and fiat currency (crypto-fiat) as exchange operations. This subjects them to supervision comparable to that of the traditional financial system. According to the Central Bank, this specific change in AML/CFT rules will take effect in February 2026. The capital requirement acts as a prudential filter designed to increase the resilience of entities, reduce bankruptcy risk, and protect retail investors.
Will the Brazilian crypto market consolidate under the new capital requirements?
However, this financial barrier could have significant consequences. It will increase compliance costs and the need for solvency, affecting the operational viability of small and medium-sized companies. The capital threshold clearly favors already established players and institutional investors with greater access to funds. Therefore, this crypto regulation by the Central Bank of Brazil could curb the entry of new local competitors and innovative startups, leading to market consolidation.
The operational timeline is clear. February 2026 is the first milestone for adapting to exchange and AML/CFT rules. The industry has a deadline until January 2028 for the full implementation of capital requirements and other structural adjustments. For product and compliance teams, the immediate priority is to assess their capital gaps and review KYC/AML flows to ensure traceability and future compliance with the crypto regulation by the Central Bank of Brazil.
