Brazilian Crypto Firms Face Mass Exodus Due to Central Bank Capital Rules
The Central Bank of Brazil's new capital rules have sent shockwaves through the country's cryptocurrency market, with more than 90% of crypto firms potentially withdrawing from the market.
According to an assessment by CoinPost, a blockchain outlet, only 20-25 out of 200-300 crypto-related firms operating in Brazil are expected to meet regulatory requirements to apply for a license. This means that around 290 operators could close their businesses or begin wind-down procedures.
The prudential capital rules introduced by the Central Bank require firms to hold capital of up to 37.2 million reais, equivalent to around $7.2 million. Smaller operators are finding this threshold a major barrier.
In addition to the high capital requirements, operators must also build audit systems, implement anti-money laundering and counter-terrorist financing frameworks, and meet ongoing reporting obligations to the central bank. The overall cost burden is causing critics to worry that the number of operators struggling to keep operating could increase.