Breaking Down Brazil’s New Crypto Regulatory Framework: What You Need to Know by 2026

November 18, 2025 | Wellington Intelligence Analysis

Overview

As crypto and traditional finance continue to converge, major jurisdictions are accelerating the establishment of structured regulatory frameworks. Brazil — Latin America’s largest digital-asset market — is the latest to formalize comprehensive rules for exchanges, custodians, and intermediaries.

The updated framework brings long-awaited legal clarity, but also introduces a strict compliance deadline of February 2026, followed by a nine-month grace period. Firms looking to operate in Brazil must begin preparing immediately.

Market Context & Adoption Trends

Brazil remains the largest crypto market in LATAM, responsible for nearly one-third of regional activity. In 2024, Brazil received an estimated $318.8 billion in crypto value, representing a 109.9% YoY growth rate, and ranked 5th globally in the 2025 Crypto Adoption Index.

Institutional-sized transfers (>$10M) account for most of this growth, signaling increasing engagement from banks, asset managers, and fintech firms. This makes regulatory clarity essential for long-term market stability.

What Brazil Implemented

In November 2025, the Banco Central do Brasil (BCB) released three resolutions — 519, 520, and 521 — operationalizing Brazil’s 2022 Virtual Assets Law. The 2023 Presidential decree remains in place, defining:

• BCB as the primary crypto regulator

• CVM (Brazilian Securities Commission) as the regulator for securities-like tokens and consumer protection matters

Together, these resolutions form Brazil’s new operational crypto framework.

Key Regulatory Requirements

1. Mandatory Licensing – SPSAV Authorization

All crypto operators — including custodians, exchanges, intermediaries, and foreign entities — must become Sociedades Prestadoras de Serviços de Ativos Virtuais (SPSAVs).

Requirements include:

• A physical, local presence (subsidiary) or partnership with a licensed Brazilian entity

• Full supervision under the BCB

  
  

2. AML / CTF Compliance

Brazil now requires comprehensive measures to prevent financial crime, including:

• Risk assessments for all customers

• Fraud detection and reporting

• Strict enforcement of the Travel Rule

• Monitoring for suspicious patterns and cross-border activity

The BCB’s Director of Regulation, Gilneu Vivan, stated that these rules will “reduce the scope for scams, fraud, and the use of virtual asset markets for money laundering.”

3. Transparency & Governance Requirements

SPSAV-licensed firms must:

• Disclose business risks, fees, regulatory information

• Segregate client assets from company assets

• Appoint accountable individuals for each business area

• Undergo independent audits

• Maintain governance and internal controls

• Protect personal data and ensure full record-keeping

  
  

4. Capital Requirements

Capital thresholds vary depending on operational scope:

• R$10.8 million to R$37.2 million (approx. $1.9M–$6.5M USD)

This may reduce market participation from small or under-capitalized firms.

Cross-Border Transactions & Stablecoins

Given that ~90% of Brazil’s crypto transfer volume involves stablecoins, Resolution 521 applies foreign-exchange (FX) regulations to virtual assets referenced in fiat currency.

These FX rules now apply to:

• International payments using virtual assets

• Transfers using virtual assets tied to card operations

• Transfers to/from self-custody wallets

• Buying, selling, or exchanging fiat-referenced virtual assets

Firms must now perform:

• Client identification

• Monitoring

• Reporting

• Compliance assessments

• Adherence to international payment limits

This closes the regulatory gap around stablecoins and introduces stricter oversight for cross-border crypto flows.

Cybersecurity Requirements

Brazil’s framework highlights cybersecurity as a critical priority.

Given significant hacks in 2024 and early 2025 — including the $1.5B ByBit breach, the largest in crypto history — the BCB now requires:

• Identity access management

• Business continuity and disaster recovery plans

• Incident response protocols

• Secure handling of sensitive information

• Full monitoring and audits of systems

• Security assessments for any smart contracts used in service delivery

Smart contracts must undergo:

• Rigorous testing

• Ongoing monitoring for vulnerabilities

• Real-time detection of abnormal activity

  
  

Implications for the Sector

Brazil's framework may signal a wider shift across LATAM. Expected outcomes include:

1. Increased Institutional Confidence

Banks, custodians, and payment institutions are more likely to participate under a clear and predictable regulatory regime.

2. Higher Market Entry Barriers

Capital thresholds and licensing requirements may push smaller players out, consolidating the market.

3. Stronger Oversight of Illicit Activity

Authorities are increasingly empowered to perform seizures, investigations, and AML/CTF monitoring — especially around stablecoins and cross-border flows.

4. Continued Retail & Institutional Growth

Major Brazilian players like Itaú, Nubank, and Mercado Pago are expected to expand their crypto offerings through 2026.

What Comes Next?

More Regulatory Guidance

The BCB also launched Public Consultation 126, proposing Basel-aligned capital rules for digital asset firms.

Ongoing Enforcement

Brazil continues to crack down on illicit crypto use, including operations such as Operation Lusocoin, which uncovered a $540M laundering scheme.

Market Expansion

Expect increased institutional inflow and continued retail adoption, particularly around stablecoin usage for remittances, savings, and cross-border payments.

Conclusion

Brazil’s 2026 crypto framework represents one of the most comprehensive regulatory models in LATAM. It enhances investor protection, aligns digital assets with Brazil’s broader financial ecosystem, and establishes strong cybersecurity and AML requirements.

For firms wishing to operate in Brazil, immediate preparation is essential due to tight authorization timelines and steep compliance obligations.