Stablecoin

Bank

<ul>
 <li aria-level="1">Proposal aims to tighten foreign exchange market control, requiring detailed reporting on transactions and customer verification processes.</li>
 <li aria-level="1">New regulation could redefine foreign exchange scope to include cryptocurrency transactions denominated in foreign currencies.</li>
</ul>
The Central Bank of Brazil (BCB) is currently considering new regulations that could fundamentally alter how cryptocurrencies are managed within the country. 
As part of these regulatory changes, a notable proposal has been introduced to restrict transfers of stablecoins, such as USDT from Tether, to self-custody wallets such as <a href="https://www.ethnews.com/metamask-boosts-user-experience-with-three-major-wallet-updates/" rel="noopener noreferrer nofollow">MetaMask</a>. 
This proposal was released for public consultation on November 29, with stakeholders given until February 28, 2025, to submit their feedback.
The BCB’s draft outlines a clear prohibition:&nbsp;
<blockquote>
 “Virtual asset service providers are not allowed to transfer virtual assets denominated in foreign currency to a self-custody wallet.”&nbsp;
</blockquote>
This rule aims to tighten control over the foreign exchange market and manage the outbound flow of Brazilian capital more effectively.&nbsp;
The changes would directly impact virtual asset service providers (VASPs), expanding the scope of their reporting duties to include detailed accounts of customer verification processes and transaction specifics.
This <a href="https://www.gov.br/participamaisbrasil/consulta-publica-n-111" rel="noopener noreferrer nofollow">initiative</a> is part of a broader strategy to increase oversight in Brazil’s rapidly evolving financial technology sector, specifically within the realms of cryptocurrency and blockchain.
 Stablecoins have been at the center of this strategy due to their growing use as a stable medium of exchange compared to their more volatile cryptocurrency counterparts.
Further contextualizing <a href="https://www.ethnews.com/brazil-plans-bitcoin-reserve-to-strengthen-financial-sovereignty/" rel="noopener noreferrer nofollow">Brazil’s regulatory</a> shift is the global movement towards more stringent oversight of cryptocurrencies, especially to curb risks associated with money laundering and financial instability. 
This trend reflects a growing acknowledgment of the substantial role that digital currencies are beginning to play in mainstream financial systems.
Additionally, the BCB’s proposal extends the definition of foreign exchange transactions to encompass the handling of cryptocurrencies denominated in foreign currencies. This would require all related activities, including storage, payments, and sales, to be reported under the new guidelines.&nbsp;
This regulatory shift in <a href="https://www.ethnews.com/brazil-could-secure-its-economic-future-with-bitcoin-an-in-depth-look-at-the-resbit-proposal/" rel="noopener noreferrer nofollow">Brazil</a> is part of a broader international trend, as governments worldwide adapt to the complexities introduced by crypto currencies. 
The BCB’s approach aims to balance the economic benefits of cryptocurrencies with the need for enhanced regulatory oversight to ensure a stable financial and economic environment.
The post <a href="https://www.ethnews.com/the-central-bank-of-brazil-proposes-banning-stablecoin-transfers-to-self-custody-wallets-impacting-virtual-asset-service-providers/" rel="noopener noreferrer nofollow">The Central Bank Of Brazil Proposes Banning Stablecoin Transfers To Self-Custody Wallets, Impacting Virtual Asset Service Providers</a> appeared first on <a href="https://www.ethnews.com" rel="noopener noreferrer nofollow">ETHNews</a>.

The Central Bank Of Brazil Proposes Banning Stablecoin Transfers To Self-Custody Wallets, Impacting Virtual Asset Service Providers

ETHNews

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