Crypto regulation in Brazil

Cryptocurrency adoption and regulation in Brazil have seen significant developments in recent years, driven by a mix of economic factors, technological innovation, and evolving regulatory frameworks. Citizens’ attitudes are increasingly favorable, with 15% of Brazilians willing to replace traditional bank accounts with cryptocurrency alternatives. This shift is fueled by economic instability, high inflation, and growing trust in digital assets as investment vehicles.

Authorities’ stance has also been proactive. The Brazilian government and regulators like the Central Bank and Securities and Exchange Commission (CVM) recognize cryptocurrencies’ potential, emphasizing innovation-friendly regulation. The 2022 Legal Framework for Virtual Assets (Law No. 14,478/22) solidified the legality of crypto services, designating Central Bank as the primary regulator.

The market has grown rapidly, with institutional adoption by major banks (e.g., Itaú, BTG Pactual) and integration of Pix, Brazil’s instant payment system, into crypto platforms. Stablecoins dominate 90% of crypto transactions, reflecting their role in everyday payments

Cryptocurrencies status

The Legal Framework for Virtual Assets effective starting June 2023 establishes guidelines for virtual asset service providers (VASPs) but delegates detailed rules to Central Bank, expected in current year. Cryptocurrencies are classified as assets, not legal tender, but their use in trade is permitted. Law No. 14,478/2022, known as the «Virtual Assets Act», was enacted on December 21, 2022, and came into force on June 20, 2023, establishing the legal framework for the provision of virtual asset services in Brazil.

The law defines «virtual assets» as digital representations of value that can be traded or transferred electronically and used for payments or investments, excluding Brazilian and foreign currencies, electronic money, loyalty points, and securities.

This differentiation ensures that virtual assets are treated as a distinct legal category, separate from traditional currencies, regulated electronic money, loyalty programs, and securities. The law focuses on regulating virtual asset service providers involved with these digital representations of value, while leaving securities and other financial assets under the CVM's jurisdiction.

The Brazilian Central Bank was designated as the main regulatory and supervisory authority for virtual asset services by Decree No. 11,563/2023, which regulates this laц. The BCB is tasked with issuing detailed regulations, authorizing VASPs, and overseeing compliance. The law explicitly excludes virtual assets representing securities from its scope, leaving those under the jurisdiction of the CVM.

Law No. 14,478/2022 provides a comprehensive legal framework for virtual asset services in Brazil, ensuring these activities are conducted under regulatory oversight to promote transparency, security, and consumer protection, while combating fraud and money laundering. It marks a significant step in integrating cryptocurrencies and related services into Brazil's formal financial system.

Crypto exchanges

Virtual asset service providers - entities that exchange, transfer, custody, or administer virtual assets on behalf of third parties-must obtain prior authorization from a federal regulatory authority before operating in Brazil. The law №14,478/2022 emphasizes free enterprise, good governance, consumer protection, information security, and anti-money laundering measures. The law amended the Criminal Code and other financial legislation to include fraud involving virtual assets and to extend anti-money laundering laws to cover virtual asset service providers.

As of now, Brazil is in the process of finalizing comprehensive regulations for Virtual Asset Service Providers, but more than 32 of local authorized VASPs are already operating in the country according to the TokenScope’s data. The Brazilian Central Bank has launched public consultations (CP 109 and CP 110) to regulate VASPs, proposing a two-phase authorization process and categorizing VASPs into three types: intermediaries, custodians, and brokers.

Right now, the biggest Brazilian cryptocurrency exchanges, which effectively act in the country include Mercado Bitcoin (the largest local exchange) and Foxbit. These platforms are widely used by Brazilian customers for buying, selling, and custody of cryptocurrencies. International platforms such as Binance, Bybit, and Gate.io also serve Brazilian users but are subject to the same regulatory requirements if they seek to operate fully within Brazil.

Taxation

In Brazil, cryptocurrencies are classified as assets, not currencies, and are subject to taxation primarily through capital gains tax and income tax depending on the nature of the transaction. Taxable events include selling crypto for Brazilian reais (BRL), trading one cryptocurrency for another, and using crypto to pay for goods or services. Receiving crypto as income (e.g., payment for services or mining rewards) is taxed as regular income.

Individuals must report crypto holdings and transactions if monthly disposals exceed BRL 5,000, and capital gains tax applies if monthly sales exceed BRL 35,000. Reporting is done annually by the last business day of April for the previous calendar year.

Crypto income is taxed under the general income tax brackets, ranging from 7.5% to 27.5% depending on total income. For crypto assets held or traded on foreign exchanges, a fixed 15% tax applies on income exceeding BRL 6,000 monthly, with graduated rates up to 22.5% for higher amounts, effective from January 2024.

Stablecoins

Stablecoins in Brazil are attracting significant attention from regulators, particularly concerning their potential for tax evasion and money laundering. Brazil's central bank chief stated that stablecoins and asset tokenization should be regulated in the country in 2025. He noted that over 90% of cryptocurrency usage in Brazil involves stablecoins, particularly those pegged to the U.S. dollar.

The central bank has proposed new regulations to restrict stablecoin transactions, especially withdrawals to self-hosted wallets, to enhance oversight. This proposal has faced backlash from the crypto industry, with concerns that it could stifle innovation and create barriers for users.

Forthcoming regulation and regulatory proposals

Brazil’s cryptocurrency regulatory landscape is rapidly evolving, with several forthcoming regulations and proposals. As it was already mentioned detailed implementing regulations of the Law №14б478/2022 by the BCB are still pending. After public consultations launched in late 2023 and mid-2024, the BCB postponed the finalization of detailed rules to 2025 to allow broader societal input and regulatory refinement. The expected regulatory package will cover licensing, operational requirements, consumer protection, AML/CFT compliance, and market conduct for VASPs.

In 2025, Brazil is planning to implement the Crypto Travel Rule, requiring VASPs to collect and share customer information during transfers, aligning with international AML standards.

A notable legislative proposal, Bill PL 957/2025, filed in March 2025, seeks to authorize voluntary and partial salary payments in Bitcoin and other cryptocurrencies. The bill limits crypto salary payments to a maximum of 50%, requiring at least half the salary to be paid in Brazilian reais. Exceptions for full crypto payments apply to foreign workers and independent contractors under specific conditions. The bill mandates salary conversion at official exchange rates to protect workers from volatility.

Brazil is moving toward a comprehensive and innovation-friendly crypto regulatory regime in 2025, balancing consumer protection, AML compliance, and market development. Key forthcoming measures include detailed VASP licensing rules, the Crypto Travel Rule, stablecoin oversight and new laws enabling partial salary payments in cryptocurrencies. These initiatives position Brazil as a leading Latin American jurisdiction in crypto regulation.