Brazil’s central bank unveiled a multi-phase plan to regulate crypto and virtual asset service providers on Monday. It aims to finalize the regulatory proposals by the end of this year.

These regulations will establish rules that verify and enforce greater transparency around the potential benefits and risks of these investments, the bank said. It said it opted for a phased approach to effectively regulate the country’s cryptocurrency service market.

“From this point on, the contributions will be used and the regulatory proposals will be finalized at the end of 2024,” the bank added.

The central bank’s latest decision pushes back the finalization of the process, according to Reuters. It follows a 2022 law that gave the bank the authority to develop these regulations.

During a congressional hearing last year, the central bank’s director of regulation, Otavio Damaso, anticipated completing the crypto regulations by June 2024.

The bank conducted a public consultation on the matter in Dec. 2023, which wrapped up in January. Following this, it announced a new public consultation scheduled for the second half of this year.

The central bank told Reuters that the first consultation aimed to collect feedback from the public on the proposed regulations. It also addressed aspects not covered by the 2022 law, such as how virtual asset service providers should segregate their assets.

To address this, it explained that the first public consultation required “reasonable dedication from the teams involved.”

The bank is also moving forward with regulating stablecoins, particularly those used for payments and foreign exchange.

Brazil Blocks Crypto Donations in Elections

In a move to crack down on cryptocurrencies in campaign finance, Brazilian authorities solidified a ban on crypto donations to political parties and candidates last week.

The electoral court defended its ban, emphasizing the need for transparency and traceability in campaign financing. It stated its commitment to protecting elections “from irregular or illicit practices.”

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