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Brazil Poised to Regulate Stablecoins and Tokenized Assets by 2025, Says Central Bank Chief

By  |  October 15, 2024

Brazil’s central bank governor, Roberto Campos Neto, announced that the country is preparing to introduce regulations for stablecoins and asset tokenization in 2025, according to a video statement he recorded for the market intelligence firm Uqbar. This move is part of the government’s broader effort to address the growing prominence of digital assets in Brazil’s financial ecosystem.

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    Stablecoins are digital currencies tied to real-world assets, such as the U.S. dollar, which provides them with relative stability compared to more volatile cryptocurrencies like Bitcoin. The central bank chief highlighted the need for regulation, noting that stablecoins and tokenized assets have become increasingly popular in Brazil. According to Campos Neto, demand for stablecoins has grown partly due to their association with tax evasion and other illicit activities.

    Per Reuters, Campos Neto has been vocal about his concerns surrounding the unregulated use of stablecoins. In earlier statements, he emphasized that these digital currencies are often used to circumvent the traditional financial system, making them attractive to those seeking to engage in money laundering or avoid taxes. The planned regulatory framework aims to mitigate these risks while fostering innovation within Brazil’s financial sector.

    Read more: The US Stablecoin Landscape: Leveraging Ecosystem Monitoring to Build Trust

    The push to regulate asset tokenization—converting real-world assets like stocks, bonds, or real estate into digital tokens—is also seen as a key priority. Campos Neto stated that the central bank views tokenization as an important development for financial markets, as it allows assets to be traded more efficiently and securely on digital platforms. The upcoming regulations are expected to provide a clear legal structure for these emerging technologies, promoting their growth while safeguarding against potential abuses.

    Brazil’s move to regulate the digital asset space reflects a global trend, as governments around the world grapple with how to incorporate cryptocurrencies into existing financial systems. The central bank governor’s comments underscore the country’s desire to strike a balance between fostering innovation and ensuring compliance with financial regulations.

    Source: Reuters