Brazil’s Central Bank is moving forward with a regulatory framework for institutional crypto firms, aiming to complete key rules by 2027 as part of a broader push to formalize digital asset markets according to local news outlet. This initiative seeks to bring oversight and licensing clarity to virtual asset service providers (VASPs) that serve businesses rather than individual retail users.
The framework targets companies that operate core digital asset infrastructure, including settlement systems, custody services, and other back‑end functions used by institutional participants. Firms such as Ripple, Fireblocks, and BitGo are expected to fall under the institutional VASP category once the rules are fully implemented.
Officials from the Central Bank’s Regulation Department have stated that authorization criteria will be finalized within the 2026–2027 horizon. Once published, existing service providers will have a 270‑day period to report their activities and seek official registration.
The institutional focus reflects the technical complexity of these operations, which differ from traditional retail exchange models. Many institutional VASPs settle transactions on private decentralized networks and provide infrastructure services rather than direct trading, requiring tailored regulatory approaches.
This phase builds on landmark resolutions issued by the Central Bank in late 2025, which established licensing, governance, cybersecurity, and operational standards for VASPs effective February 2, 2026. Existing firms must comply with these baseline requirements—including minimum capital thresholds, independent audits, and asset segregation—before fully aligning with the institutional framework.
Brazil Makes Broader Crypto Move
Brazil’s Central Securities Clearing and Depository (CERC) has gone live with a real-time settlement and clearing system powered by Vermiculus, enhancing liquidity management and reducing settlement risks for institutional and retail markets.
The platform supports multiple transaction models, including delivery-versus-payment and netting arrangements, bringing Brazil closer to global standards in post-trade infrastructure.
At the same time, the Brazilian government is advancing legislation to ban algorithmic stablecoins, tightening oversight under the Central Bank. The new rules aim to protect consumers and ensure financial stability by restricting stablecoins that operate without fully backed reserves, reflecting growing regulatory focus on risk management in the digital asset sector.