Brazil's crypto market is now regulated: what changes for investors?
That is the question posed by the new InvestNews report, written by Lucas Gabriel Marins, with input from our Partner Tiago Severo Gomes.
The deadline for companies already operating in the country to apply to the Central Bank for authorization as virtual asset service providers ended on October 30. According to the article, 74 companies filed applications. PSNA represents several of them and has closely followed what this process requires: minimum capital, governance, internal controls, auditing, anti-money laundering, cybersecurity and segregation of client assets. Not every company that started the process reached the filing stage. Those that did made a significant investment to operate within the rules.
Some points from the report:
- A regulated platform is better than an unregulated one. In Tiago's words, the new mechanisms "seek to reduce the likelihood of failures and improve client protection." Investors now benefit from Central Bank supervision, custody rules and a public registry they can consult.
- Crypto has no FGC coverage. Neither do Tesouro Direto, stocks, investment funds, debentures, CRIs, CRAs and private pension plans, and many of them are viewed as safe investments. For these products, protection comes from regulation, custody and asset segregation, not from deposit insurance. This is the logic that now applies to crypto. As Tiago notes, "a supervised institution does not mean a guaranteed investment," and this applies to the entire market.
- Guarantees also have a cost. Recent cases have shown that the FGC can misalign incentives: when investors rely on the guarantee and stop looking at the issuer, it opens the door for institutions to raise funds by paying well above the market rate. The system bears the cost. Regulation, governance and transparency protect better than insurance that dispenses with due analysis.
- The greater risk lies outside the regulatory perimeter. For those who keep funds on an unauthorized platform, Tiago points to risks of illiquidity, insolvency, custody failures, suspended withdrawals and difficulty transferring assets to another institution. In international structures, jurisdictional conflicts add to these risks.
Regulation does not eliminate risk, but it raises the market's standard. Those who invested to operate within the rules now compete with a clear advantage: investor trust.
Read the full report at InvestNews.
