Draft Bill on stablecoin regulation in Brazil requires user identification

Source: PortaldoBitcoin Original Title: Opinion on the Bill that regulates stablecoins in Brazil requires user identification Original Link: Federal Deputy Lucas Ramos (PSB-PE) presented to the Commission on Science, Technology and Innovation (CCTI) a report on Bill 4.308/2024, which creates the first specific legal framework in Brazil for stablecoins. The text tightens the treatment given to this market and establishes unprecedented requirements, especially regarding the mandatory identification of all users who trade stablecoins in the country.

Right on the first pages, Ramos, who is the rapporteur of the project, makes it clear that the priority of the regulation is to prevent stablecoins from being used in illegal activities. Therefore, he determines that platforms and issuers must adopt enhanced compliance controls, maintaining complete records of the operations, “with identification and qualification of the customer”.

The report states that this point is essential to mitigate risks and highlights: “The creation of a clear regulatory environment would not only mitigate the risks associated with the use of stablecoins but also propel Brazil to a leadership position in the global financial landscape, attracting domestic and international investments, and promoting financial inclusion.”

In justifying the rigidity of the rules, the report cites the significant growth in the use of stablecoins in Brazil and argues that, without specific regulations, the ecosystem becomes vulnerable to financial crimes. This increase in transaction volume, which rose from a few thousand in 2021 to millions per year recently, demonstrates, according to the document, that such assets already function as a relevant infrastructure within the crypto market.

Another central point of the opinion deals with backing and asset segregation. The report stipulates that no stablecoin may be issued without full backing, meaning each token must be 100% guaranteed by fiat currency, securities, or assets transparently specified by the issuer.

This collateral must exist from the moment of issuance, which prevents partial reserve structures or models based solely on future demand expectations. The text also clarifies that the type and quality of the assets that make up the collateral need to be disclosed, audited, and maintained under supervision.

The requirement for asset segregation, in turn, means that the reserves backing the stablecoin must be kept completely separate from the assets of the issuing company, and cannot be mixed with operational accounts, the company's own funds or financial investments.

This mechanism was included, according to the rapporteur, to protect the user in scenarios of insolvency, bankruptcy or mismanagement. If the company goes bankrupt, the collateral must remain intact, legally protected, and available to honor the resGate of the issued tokens. The opinion emphasizes that this asset separation will also need to be subject to independent and periodic audits, with public disclosure of the reports.

The text still prohibits the circulation of algorithmic stablecoins, those that attempt to maintain parity without real reserves, solely through market mechanisms, as they are considered unstable and potentially dangerous for investors. In the case of collateral maintained outside Brazil, the Central Bank may impose additional guarantees in order to ensure that investor protection is equivalent to what would exist with domestic reserves.

In addition, the opinion reinforces that all institutions involved with stablecoins must report suspicious operations and adopt policies to prevent money laundering and the financing of terrorism. The records of operations must be kept for at least five years, and companies will have the obligation to inform consumers of the risks in a clear manner.

Finally, the rapporteur argues that the approval of PL 4.308/2024 would bring the country closer to international practices, provide legal certainty to the sector, and create a more professionalized — albeit stricter — environment for issuers and users. For him, establishing clear rules regarding backing, asset segregation, and identification is a necessary step to prevent abuses and promote a safer and more sustainable stablecoin market in Brazil.