The Cryptocurrency Industry Association pressures the Central Bank of Brazil to adjust regulatory rules

Source: PortaldoBitcoin Original Title: Cryptocurrency Associations Pressure Central Bank for Sector Rule Adjustments with Manifesto and Judicial Response Original Link:

Central Bank of Brazil’s New Regulations Trigger Industry Response

The Central Bank of Brazil’s new rules for the cryptocurrency market continue to advance but have sparked significant reactions from industry associations representing the sector. Associations such as ABcripto and ABToken support establishing a clearer, safer regulatory framework but warn that certain aspects, especially those related to prudential requirements and taxation, could have opposite effects, such as market concentration, reduced competition, and increased litigation.

One of the main debate points involves the minimum capital and minimum net worth rules applicable to Virtual Asset Service Providers (SPSAVs). The new framework announced by the Central Bank at the end of last year adopts an activity-based logic, setting different requirement levels depending on the type of service provided (such as brokerage, custody, or third-party asset transfer).

While acknowledging progress in this model, the Brazilian Tokenization and Digital Assets Association (ABToken) sent a technical declaration to the Central Bank this week, warning that the current calibration could lead to disproportionate requirements in practice.

According to the association, the standard combination of requirements stipulated in the regulation could result in capital levels exceeding 10 million reais, even for business models that do not involve related credit risk or large-scale asset custody. In the association’s view, this tends to raise entry barriers, favor large groups, and stimulate companies and users to migrate to unregulated environments.

“Our goal is not to reduce regulatory strictness but to ensure proportionality. Excessively high capital requirements in the early stages of the regulatory framework could stifle innovation, reduce competition, and paradoxically push businesses out of the regulatory scope,” said Regina Pedroso, Executive Director of ABToken.

The document also points out potential regulatory asymmetries, noting that traditional financial institutions engaged in virtual asset activities might face lower capital requirements in some cases than SPSAVs, even when exercising similar custody and brokerage functions.

Similarly, the Brazilian Crypto Economy Association (ABcripto) stated that, on this topic, “prudential strengthening is a legitimate goal, but assessing these rules requires proportionality.”

“The cryptocurrency market is diverse, with varying business sizes and models. Overly high or uniform rules could ultimately restrict competition, hinder innovation, and concentrate the market,” the association noted.

Among the proposed recommendations, ABToken advocates for a tiered system, including the creation of a “small-scale SPSAV” category with clear operational restrictions, proportional governance requirements, and capital aligned with actual risk exposure.

The association also calls for a phased approach when applying new requirements to existing companies, respecting the transition period stipulated by the Central Bank itself, and aligning with international practices such as the European MiCA regulation.

Cryptocurrency IOF Tax

Another sensitive issue in the new regulatory environment involves the potential taxation of crypto assets through the Financial Transactions Tax (IOF), especially on stablecoin transactions. ABcripto Chair Júlia Rosin has stated in interviews that if the government advances taxation through decrees without broader legislative debate, the entity may pursue judicial action.

In a statement sent to this platform, ABcripto acknowledged that clear rules are essential to provide legal certainty for the industry and users but emphasized that stablecoins should not be equated with fiat currency. “The legal framework for virtual assets explicitly states that virtual assets are not to be confused with national or foreign currencies,” the association said. For the entity, treating stablecoin transactions as foreign exchange transactions for tax purposes would lead to interpretations beyond legal provisions.

The association also highlighted that the Central Bank’s inclusion of certain crypto asset transactions in the foreign exchange market is for regulatory purposes—monitoring and supervision—not for creating new tax bases.

Furthermore, ABcripto pointed out that IOF collection has already “appeared at specific points in the ecosystem, such as during stablecoin issuance (minting), only when effectively exchanging traditional currency for the issuer’s reserves.”

For ABcripto, any changes expanding the scope of IOF taxation on crypto assets should go through Congress, preferably via supplementary legislation, to ensure predictability and legal security. The association also stated that it closely monitors regulations by the Central Bank and the Ministry of Finance and advocates that prudential and tax requirements should consider the actual risks of each activity, include transitional phases, and be established through dialogue with the industry.