“Brazil’s crypto market has entered a regulatory shakeout, with industry estimates indicating that fewer than 10% of companies currently operating in the country are likely to seek Central Bank authorization before an October deadline. Summary Fewer than 10% of crypto companies operating in Brazil are expected to seek central bank authorization, according to industry estimates.”, — write on: www.crypto.news
Brazil’s crypto market has entered a regulatory shakeout, with industry estimates indicating that fewer than 10% of companies currently operating in the country are likely to seek Central Bank authorization before an October deadline.
Summary
- Fewer than 10% of crypto companies operating in Brazil are expected to seek central bank authorization, according to industry estimates.
- Only 20 to 25 firms may apply for authorization, while roughly 10 are expected to ultimately secure a license.
- Existing crypto service providers have until Oct. 30 to begin the authorization process or face shutting down their operations within 30 days.
- Capital requirements can range from R$10.8 million to R$37.2 million, alongside governance, security, audit and compliance obligations.
- Several firms have already closed, consolidated operations or transferred retail customers as the market adjusts to the new rules.
Valor Investe reported that people closely following the licensing process estimate Brazil has between 150 and 200 domestic and foreign companies providing virtual asset services, although some industry estimates put the figure closer to 300. Only 20 to 25 are expected to have the capital, structure or interest needed to apply, while roughly 10 could ultimately secure authorization as digital asset service providers, known locally as PSAVs.
Companies that were providing virtual asset services before the new rules took effect in February have until Oct. 30 to file the first stage of their authorization request. Businesses that do not enter the process by the deadline will have 30 days to stop operating.
The estimates remain unofficial, and the number of applications will not become clear until the filing period closes. Financial institutions that already hold a banking license from the Central Bank do not need a separate authorization to operate in the sector, while fund managers remain under the regulatory framework of Brazil’s Securities and Exchange Commission, or CVM.
Brazil crypto licensing could leave around 10 authorized firms
Several crypto businesses have already restructured or withdrawn from Brazil as the authorization deadline approaches.
Bitnuvem closed its operations this year, citing higher operating costs and regulatory requirements among the reasons for its decision. NovaDAX followed in June, ending its Brazilian operation under an agreement that allowed customers to migrate to Foxbit.
Digitra.com later closed its retail business and directed customers to Foxbit, while BTG Pactual incorporated its Mynt crypto platform into the bank’s existing platforms. The move brought the group’s digital asset activities within BTG Pactual’s existing structure.
Bitso changed its Brazilian retail model in early September through a partnership with Mercado Bitcoin. Retail customers in the country are being directed to invest through Mercado Bitcoin, while Bitso is concentrating its local business on infrastructure and institutional services.
Coinext subsequently announced that it would close its retail operation after nearly a decade, ending crypto trading and custody services for those customers. Coinext Asset, its institutional asset management business, will continue operating.
Unlike some of the earlier exits, Coinext directly cited the new regulatory environment when explaining its decision. The company said it assessed the requirements for remaining in the market, held discussions with potential partners and considered alternatives, but found no viable option.
Industry participants cited by Valor Investe said further customer portfolio transfers are under negotiation, meaning more restructuring announcements could emerge before the transition period ends.
Capital requirements have raised the entry threshold
Capital requirements have become one of the main issues facing companies deciding whether to seek authorization.
During Public Consultation 109/2024, the Central Bank proposed minimum share capital of R$1 million for virtual asset intermediaries such as exchanges, R$2 million for custodians and R$3 million for brokers carrying out both activities.
The final rules announced in November set considerably higher requirements. Depending on a company’s activities and risk profile, required capital can range from R$10.8 million to R$37.2 million.
The authorization process extends beyond capital. Companies must meet requirements covering governance, internal controls, risk management, security, anti-money laundering procedures, technical certification, audits and periodic regulatory reporting.
Brazil approved another set of capital and risk rules in July, as crypto.news previously reported. The requirements begin taking effect in January 2027 and will eventually place virtual asset service providers in the S4 regulatory segment by June 2028. Smaller S5 institutions will no longer be permitted to provide virtual asset services.
The licensing framework already requires applicants and companies seeking license renewals to provide independent audit reports. Auditors must assess areas including anti-money laundering controls, segregation of customer assets, internal risk management and employee compliance programs.
Licensed exchanges face another requirement from Jan. 1, 2027, when they must provide daily asset sufficiency reports showing they hold enough assets to cover operational and security risks.
Regulatory timetable has drawn industry concerns
Ripple’s Latin America public policy and regulatory director, Isabel Sica Longhi, said the pressure was not limited to the substance of the requirements. She pointed to the pace at which new measures were introduced while companies were still adapting to earlier rules.
“The biggest problem was this sequencing, where everything came together very quickly, without even waiting to see whether the risks that the Central Bank intended to address with Resolutions 519, 520 and 521 would actually be addressed before adjusting the rules,” Longhi said, according to Valor Investe.
Executives cited in the report said the Central Bank had set a high regulatory threshold after problems involving fintech companies. Sources pointed to fraud, cyberattacks, third-party use of accounts and weak control structures as issues that contributed to the regulator’s approach.
Security requirements have continued to expand. In August, the Central Bank introduced rules requiring certain crypto transfers above $10,000 to be held for as long as 24 hours from Jan. 1, 2027 when funds are being sent to foreign virtual asset providers or self-custody wallets. Providers may release transactions earlier after completing the required risk review.
The regulator has separately developed a real-time crypto threat alert system with Hypernative after attackers converted part of the proceeds from a major cyberattack into cryptocurrency. Foxbit and Mercado Bitcoin were among the companies preparing to participate in the threat monitoring network.
Smaller crypto companies face higher compliance costs
Companies expected to remain in Brazil have not uniformly opposed tighter oversight. One executive quoted by Valor Investe described compliance as a necessary part of operating in a regulated market, saying that “regulation is not something you cry about, you comply with it.”
The executive said clear rules and Central Bank supervision were necessary for the sector to mature, while arguing that the chosen calibration could reduce innovation by excluding smaller companies and business models unable to absorb regulatory costs.
Longhi similarly described some reduction in the number of companies as a natural part of regulation but drew a distinction between removing unsuitable operators and excluding businesses simply because of their size.
“The thinning of the market is natural and should happen anyway,” she said. “What is not natural, if it happens, is preventing the market from existing and removing small participants simply because they are small participants.”
Brazilian banks, meanwhile, have been expanding access to digital assets while operating under their existing regulatory structures. Itaú, Bradesco, Santander, Banco do Brasil and Nubank have expanded crypto services since 2025, while Central Bank filings from March showed that the banks held no virtual assets on their own balance sheets. Nubank offered 28 digital assets to more than 7 million crypto customers, while Itaú offered 15 assets through its investment platform.
Mercado Bitcoin has continued expanding during the regulatory transition. Tether invested $20 million in the company in July as part of a strategic financing round focused on tokenized assets, payments, lending and onchain capital markets. Mercado Bitcoin said at the time that it served 4.5 million users and had issued more than R$2 billion in tokenized assets.
The final number of companies entering the Central Bank authorization process will become clearer after Oct. 30. Until then, industry participants cited by Valor Investe expect further closures, customer migrations, mergers and partnerships as companies decide whether to seek their own authorization or operate through other regulated structures.