Brazil central bank urges stablecoins be treated as e-money
Central Bank of Brazil told a congressional committee stablecoins should be classified as electronic monetary instruments; industry group Abcripto warned it would hamper adoption.
At a hearing Tuesday before the Chamber of Deputies’ Economic Development Committee, a consultant for the Central Bank’s Department of Regulation of the Financial System (Denor) presented the bank’s view that stablecoins should be regulated as electronic monetary instruments rather than as general digital assets.
Fábio Araújo, a Denor consultant, differentiated stablecoins from tokens such as bitcoin and ether, saying stablecoins are tied to real-world assets and may function as means of payment. He told the committee, “With stablecoins, it’s different… a stablecoin should be considered a real-world asset and, more precisely, when it presents characteristics compatible with means of payment, it should be understood as a form of monetary instrument.”
The central bank position is not a final legal ruling. Lawmakers are preparing to review Bill 4308/2024, introduced this year by Deputy Aureo Ribeiro, which aims to set rules for stablecoins. Denor advises the central bank on regulatory matters and its analysis is expected to influence debate in Congress.
Abcripto, the Brazilian Association of Cryptoeconomics, rejected the bank’s classification. The trade group, which includes exchanges and firms such as Binance, Coinbase, Fireblocks, Visa, Tether, OKX and Ripio, said treating stablecoins as electronic monetary instruments would create regulatory conflicts, detach Brazil from international regulatory trends and deter adoption at both retail and institutional levels. Abcripto also raised concerns about the impact on virtual asset service providers (VASPs).
Separately, the central bank issued a resolution that increases oversight of VASPs and brings their regulatory treatment closer to that applied to securities institutions. Regulators and industry observers say aligning VASP oversight with securities rules could prompt market consolidation and increase pressure on smaller crypto firms, potentially forcing some to exit the market.
The outcome of congressional deliberations on Bill 4308/2024 and any subsequent regulatory actions by the central bank will determine how issuers and service providers must operate in Brazil going forward.
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