The Brazilian central bank is looking to regulate digital currencies as the country takes to digital payments. The president of the Central Bank of Brazil has been pushing for friendlier regulations for the sector and in a recent event, he revealed that the bank is seeking to establish regulatory clarity for digital currencies.
Brazil has been the leader in digital currency adoption in Latin America. This has been despite the lack of a regulatory framework to police the industry, something that Roberto Campos Neto, the president of the central bank, is determined to change.
Speaking at an event hosted by the Council of the Americas, Campos Neto acknowledged the rise of digital currencies, stating that they “come out of a need that people have for payments to be very fast, open, secure, and have transparency in every sense.”
He revealed that the bank has been in ongoing talks with the local securities regulator to adapt a new framework that allows digital currencies to exist alongside platforms like Pix, making them easier to access for the average Brazilian.
Pix is a digital payments initiative backed by the Brazilian government that has become wildly popular in the country. It now boasts of having 96 million users, close to half the population of the South American country. Earlier this month, Pix hit a record 40 million transactions in a day.
Campos Neto revealed that regulators are however concerned about the use of digital currencies as speculative assets rather than transactional currencies, Bloomberg reports. His concern is valid, especially with the continued misrepresentation of Bitcoin as a store of value by the BTC faction, in clear contrast to Satoshi’s vision of Bitcoin being peer-to-peer electronic cash.
“We need to pay attention to that. The financial market is changing so much that it’s all becoming data. We need to reshape the world of regulation,” Campos Neto added.
The central bank’s move comes as Brazilian police launched Operation Compliance, a probe against digital currency money laundering. About 150 federal police officers are involved in the operation and already, they have executed dozens of seizure warrants across the country.
Regulatory clarity has continued to claim its victims in Brazil, with exchanges that offered unlicensed products being forced to take them down. Not surprisingly, one of these is perennial law flouter Binance. As Brazilian outlet Portal do Bitcoin reported, Binance has suspended the trading of futures contracts on its Brazilian platform to comply with regulations.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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