The missing plan in Brazil should be steady without being restrictive to avoid falling behind in the cryptoassets race.

View a summary of the news

• The Brazilian financial sector in 2026 is experiencing a contradiction between progress in technology and increased regulatory restrictions.
• Pix facilitated the transfer of R$ 35.4 trillion in 2025 and served as a model for BRICS Pay, as asset tokenization continued to progress.
• New regulations from the Central Bank control services related to cryptocurrencies, mandating authorization and a minimum amount of capital.
• The regulation is designed to safeguard investors following the failures in the cryptocurrency industry by ensuring asset segregation.
• The regulatory control is a reaction to bank fraud and the exploitation of fintechs by criminal organizations, like Compliance Zero.

There is a contradiction at the heart of the Brazilian financial market in the first half of 2026, which directly impacts entrepreneurs and investors.

The country is making significant progress, with the Pix system facilitating a large amount of money transactions and gaining global recognition. This has also led to the development of the BRICS architecture Pay, a blockchain-based system for trade between BRICS countries using local currencies. Real-world asset tokenization is no longer just a concept but is being implemented in practical products, particularly in receivables. Brazil is now exporting financial technology rather than relying on imports.

The regulatory siege seldom ended quickly. That’s the main focus.

What modifications have occurred in practical application

In November 2025, the Central Bank introduced three regulations that took effect in February 2026, changing the landscape of the industry. Resolution BCB No. 520 outlines the requirements for Virtual Asset Services Providers in the country, emphasizing governance, risk management, cybersecurity, internal controls, and the separation of customer assets from the company’s own funds. Resolution BCB No. 519, explained in Normative Instruction No. 704/2026, governs the authorization process, while Resolution BCB No. 521 links stablecoin operations to the exchange market.

Brokers, custodians, and foreign platforms must now meet stricter regulations, including obtaining authorization from the regulator, maintaining a higher minimum capital, having a physical headquarters in the country, appointing resident directors, and implementing effective compliance programs. Existing entities have until October 30, 2026 to comply with these requirements, including foreign platforms serving Brazilian clients.

For investors, there are significant benefits. Understanding that brokers must separate their assets from funds, demonstrate reserves, and undergo independent yearly audits is not red tape but crucial in safeguarding their assets and avoiding becoming creditors in the event of a bankruptcy. The concept of patrimonial segregation, which was not included in Law no 14,478/2022, has now become more defined.

Why the blockade arrived at this time

Recruitment is a serious matter that involves understanding the financial system as a whole. Recent months have shed light on ongoing investigations into bank fraud and the inflation of assets through fictitious operations. Operations such as Compliance Zero, Hidden Carbon, and Hidden Flow suggest the involvement of fintechs acting as “parallel banks” for organized crime. Reports indicate that six of these entities have collectively conducted R $ 26 billion in suspicious transactions, using tactics that obscure the origin of funds and make tracking difficult.

The state’s response was severe, with the Central Bank moving up the deadline for payment institutions to seek authorization and implementing Pix ceilings for unauthorized participants. Additionally, data sharing with the Revenue was restricted. A new accessory obligation in the crypto sector, aligned with OECD CARF standards, will take effect in July, expanding reporting requirements for operations abroad, in DeFi, and with fractional NFTs. In the face of significant fraud, tightening regulations is not only justified but essential to prevent harm to ordinary investors in an unregulated market.

Building the missing balance is discussed in the text.

Calibrating regulations too strictly can stifle innovation and harm legitimate operators, potentially driving out honest innovators in favor of fraudsters. High minimum capital requirements and excessive compliance burdens may be appropriate for large entities, but can be prohibitive for startups and small players with genuine innovation and no history of fraud.

If the aim is to elevate the industry standard, this effort must be accompanied by other measures. These include expanding regulatory sandbox opportunities, providing clear incentives for technological advancement, and coordinating these actions across various institutions. This collaborative plan involving regulators, government technical departments, companies, industry groups, and experts is essential to keep Brazil at the forefront of financial technologies while maintaining a stable business environment. The focus is on aligning innovation with security rather than pitting them against each other.

Technological competition is worldwide and continuous. Blockchain has become crucial infrastructure, integrating with Artificial Intelligence in various products. Brazil possesses valuable assets like talent, practical applications, and a capable regulator. It would be unwise to jeopardize this advantage by imposing excessive regulations that could drive away entrepreneurs and investments to other countries.

The key is not to decide between tradition and innovation. It is about properly assessing – differentiating between entrepreneurial fraud, the openness of the protocol, and legitimate experimentation with accounting practices. When things go too far, it is the responsibility of the judiciary – also acting as a safeguard – to oversee and prevent abuses, require justifications, and uphold the procedural rights of those being investigated or penalized. Sound innovation requires legal assurance in both aspects: preventing fraud and arbitrariness.

What to look out for going forward

Brazil’s trajectory is moving towards institutionalization rather than prohibition. Cryptocurrency is transitioning from a peripheral market to being integrated into the regulated financial system, allowing for self-management by those willing to take on risks and acknowledge the responsibilities of decentralized technology. Regulatory clarity paves the way for institutional acceptance, collaboration with banks, and the availability of regulated products to a broader audience, providing investors with more protection and the obligation to grasp the landscape before engaging.

The development of money’s future is currently in progress. This column will explore whether we will support innovation within legal boundaries through a well-thought-out approach involving both regulators and creators, or if we will allow fear of fraud to hinder our progress.

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Lucas Carapiá is a lawyer and professor who holds a Master of Law from UFBA. He specializes in blockchain and the regulation of cryptocurrencies.

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The opinions expressed here are not considered legal advice or research recommendations, and cannot replace an individual analysis of a specific case.

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