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Brazil

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#291
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Archived
Created
2025-06-26 09:13
Workflow Stage
Initial Research

Executive Summary

Retail cryptocurrency trading is legally permitted in Brazil and is subject to a developing regulatory framework. The Central Bank of Brazil (BCB) is designated as the primary regulator for virtual asset service providers (VASPs), while the Securities and Exchange Commission of Brazil (CVM) retains authority over virtual assets that qualify as securities. Law No. 14.478/2022 (Brazilian Virtual Assets Law or BVAL) provides the foundational legal framework for VASPs, including KYC/AML requirements. New regulations from the BCB are anticipated in 2025, covering licensing requirements, operational standards, and consumer protection measures.

Key Pillars

The primary regulator is the Central Bank of Brazil (BCB), responsible for authorizing and supervising VASPs. Key pillars include Law No. 14.478/2022, which provides the legal framework for VASPs and mandates compliance with AML/KYC procedures. Detailed licensing and operational rules are expected to be finalized and implemented by the BCB in 2025.

Landmark Laws

  • Law No. 14.478/2022 (Brazilian Virtual Assets Law - BVAL):
    • Date of Enactment: December 2022
    • Date Effective: June 20, 2023
    • Summary: Establishes guidelines for virtual asset services and providers. Mandates compliance with anti-money laundering (AML) control mechanisms and assigns regulatory authority to the Brazilian Central Bank (Banco Central do Brasil or BCB) for oversight purposes.
  • Decree No. 11,563/2023:
    • Date of Issue: June 13, 2023
    • Summary: Granted authority to the Brazilian Central Bank (Banco Central do Brasil or BCB) to: (1) regulate the provision of virtual asset services; (2) regulate, authorise and supervise VASPs; and (3) deliberate on other matters covered by the BVAL.

Considerations

Cryptocurrencies are generally classified as assets or movable property in Brazil. As of June 2025, a flat capital gains tax of 17.5% applies to all crypto transactions, eliminating previous exemptions for smaller gains. The BCB and CVM have issued warnings regarding the risks associated with cryptocurrency investments, emphasizing the need for investor diligence.

Notes

Historically, the Central Bank of Brazil (BCB) first acknowledged cryptocurrencies in 2014, clarifying they were distinct from electronic money. The BCB is in the process of developing detailed regulations for VASPs, with new rules anticipated in the second half of 2025 following public consultations. Major financial institutions, like Itaú Unibanco, have already begun offering retail crypto services. The Brazilian government is actively seeking technological solutions to enhance the tracking of cryptocurrency transactions to combat financial crimes. Monthly reporting is required for transactions on offshore platforms exceeding certain thresholds.

Detailed Explanation

Retail cryptocurrency trading is legally permitted in Brazil and subject to a developing regulatory framework. In 2014, the Central Bank of Brazil (BCB) acknowledged cryptocurrencies, distinguishing them from electronic money. For several years, the market operated without specific crypto-focused regulations, although general financial laws and regulator warnings applied. A significant milestone was the enactment of Law No. 14.478/2022 (Brazilian Virtual Assets Law or BVAL), which came into effect in June 2023. This law established a legal framework for virtual asset services and designated the BCB as the primary regulator for virtual asset service providers (VASPs). The Securities and Exchange Commission of Brazil (CVM) retains authority over virtual assets that qualify as securities. Decree No. 11,563/2023, issued on June 13, 2023, further granted the BCB authority to regulate, authorize, and supervise VASPs. The BCB is currently developing detailed regulations for VASPs, with new rules anticipated to be rolled out in 2025 following public consultations. These regulations are expected to cover licensing requirements, operational standards, and consumer protection measures. Companies intending to offer virtual asset services are expected to seek authorization from the BCB. Law No. 14.478/2022 amended existing AML laws to include VASPs, requiring them to implement KYC procedures and report suspicious transactions to the Financial Activities Control Council (COAF). The Brazilian government is also actively seeking technological solutions to enhance the tracking of cryptocurrency transactions to combat financial crimes. The Brazilian Federal Revenue Office (Receita Federal do Brasil - RFB) has established reporting requirements for cryptocurrency transactions. As of June 2025, significant changes to crypto taxation were implemented, with a flat capital gains tax of 17.5% applying to all crypto transactions, eliminating previous exemptions for smaller gains. This tax applies regardless of whether the assets are held on domestic or offshore platforms, or in self-custody wallets. Monthly reporting is required for transactions on offshore platforms exceeding certain thresholds. Historically, the BCB and CVM have issued warnings regarding the risks associated with cryptocurrency investments due to their volatility and the potential for fraud.

Summary Points

Okay, here's a bullet-point summary of the Retail_Trading_Status in Brazil, based on the provided report, designed for quick comprehension:

Retail Trading Status in Brazil: Allowed-Regulated (Report Date: June 26, 2025)

I. General Status

  • Legality: Buying, selling, and holding cryptocurrencies by individuals is legally permitted in Brazil.
  • Classification: Cryptocurrencies are generally classified as assets or movable property.
  • Regulatory Environment: Subject to a developing regulatory framework aimed at providing legal certainty, protecting investors, and preventing illicit activities.

II. Key Regulatory Bodies & Roles

  • Central Bank of Brazil (BCB):
    • Primary regulator for Virtual Asset Service Providers (VASPs).
    • Responsible for authorizing and supervising VASPs.
    • Developing detailed regulations for VASPs, expected to be finalized and implemented in the second half of 2025.
  • Securities and Exchange Commission of Brazil (CVM):
    • Retains authority over virtual assets that qualify as securities.
  • Financial Activities Control Council (COAF):
    • Receives reports of suspicious transactions from VASPs as part of AML compliance.
  • Brazilian Federal Revenue Office (Receita Federal do Brasil - RFB):
    • Responsible for establishing and enforcing reporting requirements for cryptocurrency transactions and taxation.

III. Key Legislation & Regulations

  • Law No. 14.478/2022 (Brazilian Virtual Assets Law - BVAL):
    • Enacted in December 2022, came into effect in June 2023.
    • Provides the foundational legal framework for VASPs.
    • Mandates compliance with anti-money laundering (AML) control mechanisms.
    • Designates the BCB as the competent authority to regulate, authorize, and supervise VASPs.
  • Decree No. 11,563/2023:
    • Granted authority to the BCB to regulate VASPs.
  • Amendment to Law No 9,613/1998:
    • Included VASPs among the entities subject to AML control mechanisms.

IV. Requirements for Compliance (VASPs)

  • Authorization from BCB: Companies intending to offer virtual asset services are expected to seek authorization from the BCB.
  • Licensing Requirements: Detailed licensing rules are expected to be finalized and implemented in 2025.
  • Operational Standards: Forthcoming regulations are expected to cover operational standards for VASPs.
  • KYC/AML Obligations:
    • VASPs must comply with Know-Your-Customer (KYC) procedures.
    • VASPs must report suspicious transactions to COAF.
  • Investor Protection Measures: Regulations mandate AML/KYC protocols for VASPs, reducing fraud and scam risks.

V. Taxation

  • Reporting Requirements: Individuals are required to report their crypto holdings and transactions to the RFB.
  • Capital Gains Tax:
    • A flat capital gains tax of 17.5% applies to all crypto transactions.
    • This tax applies regardless of transaction size, profit amount, or asset type.
    • Applies whether assets are held on domestic or offshore platforms, or in self-custody wallets.
  • Elimination of Exemptions: The previous exemption for smaller gains (up to BRL 35,000 per month) has been removed.
  • Monthly Reporting: Required for transactions on offshore platforms exceeding certain thresholds.

VI. Notable Restrictions or Limitations

  • Official Warnings: The BCB and CVM have issued warnings regarding the risks associated with cryptocurrency investments (volatility, potential for fraud).
  • Evolving Regulations: The regulatory landscape is still maturing, with more detailed rules expected.

VII. Recent Developments or Changes (as of June 26, 2025)

  • BCB Regulatory Priorities: The BCB announced its regulatory priorities for 2025 and 2026, including virtual asset regulations. New regulations are expected in the second half of 2025.
  • Taxation Changes: Significant changes to crypto taxation were implemented, with a flat capital gains tax of 17.5% applying to all crypto transactions, eliminating previous exemptions for smaller gains.
  • Increased Monitoring: The Brazilian government is actively seeking technological solutions to enhance the tracking of cryptocurrency transactions to combat financial crimes.
  • Mainstream Adoption: Major financial institutions, like Itaú Unibanco, have already begun offering retail crypto services, indicating a move towards mainstream adoption within a regulated environment.

Full Analysis Report

Retail Trading Status in Brazil: Allowed-Regulated

Report Date: June 26, 2025

Topic: Retail_Trading_Status

Description: Assessment of whether individual citizens and residents in Brazil are legally permitted to buy, sell, and hold cryptocurrencies, and the regulatory environment surrounding this activity.

Status: Allowed-Regulated

Narrative Explanation:

Retail cryptocurrency trading is legally permitted in Brazil and is subject to a developing regulatory framework. The Brazilian government has taken significant steps to formalize the digital asset market, aiming to provide legal certainty, protect investors, and prevent illicit activities.

Historically, the Central Bank of Brazil (BCB) first acknowledged cryptocurrencies in 2014, clarifying they were distinct from electronic money. For several years, the market operated without specific crypto-focused regulations, though general financial laws and warnings from regulators applied. A significant milestone was the enactment of Law No. 14.478/2022 (Brazilian Virtual Assets Law or BVAL), which came into effect in June 2023. This law established a legal framework for virtual asset services and designated the BCB as the primary regulator for virtual asset service providers (VASPs). The Securities and Exchange Commission of Brazil (CVM) retains authority over virtual assets that qualify as securities.

The BCB is currently in the process of developing detailed regulations for VASPs, with new rules anticipated to be rolled out in 2025 following public consultations. These forthcoming regulations are expected to cover licensing requirements, operational standards, and consumer protection measures for VASPs. Even before these specific VASP regulations are finalized, companies intending to offer virtual asset services are expected to seek authorization from the BCB.

Key Regulatory Aspects:

  • Legality: Buying, selling, and holding cryptocurrencies by individuals is permitted in Brazil. Cryptocurrencies are generally classified as assets or movable property.
  • VASP Regulation: Law No. 14.478/2022 provides the foundational legal framework for VASPs. The BCB is responsible for authorizing and supervising these entities. Detailed licensing and operational rules are expected to be finalized and implemented in 2025. Major financial institutions, like Itaú Unibanco, have already begun offering retail crypto services, indicating a move towards mainstream adoption within a regulated environment.
  • KYC/AML Requirements: VASPs are subject to anti-money laundering (AML) and know-your-customer (KYC) obligations. Law No. 14.478/2022 amended existing AML laws to include VASPs, requiring them to implement KYC procedures and report suspicious transactions to the Financial Activities Control Council (COAF). The Brazilian government is also actively seeking technological solutions to enhance the tracking of cryptocurrency transactions to combat financial crimes.
  • Taxation: The Brazilian Federal Revenue Office (Receita Federal do Brasil - RFB) has established reporting requirements for cryptocurrency transactions. Individuals are required to report their crypto holdings and transactions. As of June 2025, significant changes to crypto taxation were implemented, with a flat capital gains tax of 17.5% applying to all crypto transactions, eliminating previous exemptions for smaller gains. This tax applies regardless of whether the assets are held on domestic or offshore platforms, or in self-custody wallets. Monthly reporting is required for transactions on offshore platforms exceeding certain thresholds.
  • Investor Protection: A key aim of the evolving regulatory framework is to protect investors and ensure market integrity. The BCB's public consultations and phased approach to regulation are intended to create a robust framework for VASP operations.
  • Official Warnings: Historically, the BCB and CVM have issued warnings regarding the risks associated with cryptocurrency investments due to their volatility and the potential for fraud. These warnings continue to emphasize the need for investor diligence.

The current status is "Allowed-Regulated" because while individuals are free to trade cryptocurrencies, the environment is increasingly governed by specific legislation and oversight from regulatory bodies, particularly concerning the operation of service providers and tax obligations. The regulatory landscape is still maturing, with more detailed rules expected, but a clear legal framework is in place.

Relevant Text Excerpts and Sources:

  • Law No. 14.478/2022 (Brazilian Virtual Assets Law - BVAL):

    • "In December 2022, the Brazilian government passed a new legal framework for virtual assets, which came into force in June 2023. Although the act conveys regulatory powers over virtual assets to the Brazilian Central Bank, the Bank itself has announced a delay of the rollout of new rules until 2025 to allow for an extended consultation period."
    • "The Brazilian Virtual Assets Law (BVAL), enacted on 21 December 2022, establishes guidelines for virtual asset services and providers, and became effective on 20 June 2023. It mandates compliance with anti-money laundering (AML) control mechanisms and assigns regulatory authority to the Brazilian Central Bank (Banco Central do Brasil or BCB) for oversight purposes."
    • "The Legal Framework for Virtual Assets focused on more general concepts and principles, and the Brazilian Central Bank (Banco Central do Brasil – “BCB”) was designated the competent authority to effectively regulate, authorise and supervise the provision of services of virtual asset service providers (“VASPs”) in Brazil, pursuant to Decree No. 11,563 of June 13, 2023."

  • Central Bank of Brazil (BCB) Regulatory Role and Timeline:

    • "On 13 June 2023, Decree No 11,563/2023 granted authority to the Brazilian Central Bank (Banco Central do Brasil or BCB) to: (1) regulate the provision of virtual asset services; (2) regulate, authorise and supervise VASPs; and (3) deliberate on other matters covered by the BVAL."
    • "The BCB’s proactive approach involving multiple public consultations and a continuous and open channel of communication with the market and relevant players demonstrates the commitment of the BCB to innovation and the alignment of the country with international standards. The crypto market in Brazil currently awaits the unveiling of the final regulations from the BCB, which are expected to provide much-needed clarity, legal certainty and a robust framework for the operation of the VASPs in Brazil..."
    • "On April 24, 2025, the Central Bank of Brazil (BCB) announced its list of regulatory priorities for 2025 and 2026. The main topics include... virtual asset regulations... New regulations are expected in the second half of 2025."

  • KYC/AML Requirements:

    • "The BVAL also amended Law No 9,613/1998 to include VASPs among the entities subject to the anti-money laundering (AML) control mechanisms, requesting that VASPs comply with the know-your-client (KYC) procedures, and register with and report on the relevant transactions to the Brazilian Council for Financial Activities Control (Conselho de Controle de Atividades Financeiras or COAF), among other ancillary obligations."
    • "Investor protection: Regulations mandate AML/KYC protocols for VASPs, reducing fraud and scam risks. For example, licensed exchanges must verify user identities and report suspicious transactions, creating a safer trading environment."

  • Taxation:

    • "Declaring your crypto holdings in Brazil has never been more urgent. With the 2025 tax return covering both the old and new regimes, even small errors could result in penalties. Receita Federal now requires more detailed reporting, and the recent removal of the BRL 35,000 exemption means nearly all gains are taxable."
    • "Under the new law, a flat 17.5% capital gains tax now applies to all crypto transactions, regardless of transaction size, profit amount, or asset type. This includes tokens held on centralized exchanges, self-custody wallets, and foreign platforms."
    • "Until now, Brazilian residents who sold up to 35,000 Brazilian reals (roughly $6,300) in crypto assets per month were exempt from income tax. Gains beyond that were taxed progressively... Brazil has ended its tax exemption for small-scale crypto profits, introducing a 17.5% flat rate on all capital gains from digital assets."

Direct URL Links to Sources:

  1. https://www.wyden.com/insights/brazil-virtual-asset-law-for-vasps (Note: While the article is dated October 2024, it references the June 2023 law and anticipated 2025 rollout of new rules.)
  2. https://www.ibanet.org/article/0C9B6A0A-660A-4A8D-8F7E-0C1B0D7E7E2C (Dated April 30, 2025)
  3. https://koinx.com/knowledge-center/crypto-tax-calculators/how-to-declare-crypto-on-your-brazilian-tax-return/ (Dated June 20, 2025)
  4. https://gofaizen-sherle.com/crypto-license/brazil (References 2025 for finalization of regulations)
  5. https://kychub.com/global-cryptocurrency-regulations-in-2025/
  6. https://tax.thomsonreuters.com/blog/cryptocurrency-global-regulatory-updates/ (Dated February 20, 2025)
  7. https://notabene.id/crypto-travel-rule-brazil (References 2025 and ongoing consultations)
  8. https://kraken.com/learn/crypto-tax-brazil (General guide, refers to 2025 tax year)
  9. https://learn.bybit.com/crypto-regulation/brazil-crypto-regulation-central-bank-plans/ (Dated June 25, 2025)
  10. https://coinledger.io/guides/brazil-crypto-tax (General guide, refers to 2025)
  11. https://www.mattosfilho.com.br/en/unico/brazils-central-bank-presents-regulatory-priorities-for-2025-and-2026/ (Dated May 5, 2025)
  12. https://koinx.com/blog/brazil-capital-gains-tax-on-cryptocurrencies/ (Dated June 25, 2025)
  13. https://www.ifcreview.com/news/2025/june/20/brazil-brazil-ends-crypto-tax-exemption-imposes-175-flat-rate-on-gains/ (Dated June 20, 2025)
  14. https://www.globallegalinsights.com/practice-areas/banking-laws-and-regulations/brazil (Dated March 11, 2025, references 2024 consultations and forthcoming regulation)
  15. https://coinfomania.com/cryptocurrency-regulations-in-brazil/ (Dated April 5, 2025)
  16. https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/brazil (Dated October 25, 2024, references June 2023 law and pending BCB rules)
  17. https://www.pwc.com/gx/en/financial-services/pdf/pwc-global-crypto-regulation-report-2025.pdf (Report dated March 2025, table summary as of Jan 2025)
  18. https://ueex.com/en/blog/best-crypto-exchanges-in-brazil-2025-10312 (Dated April 9, 2025)
  19. https://coingeek.com/brazil-eyes-monitoring-crypto-transactions-amid-tax-uproar/ (Dated June 24, 2025)
  20. https://iclg.com/practice-areas/public-investment-funds-laws-and-regulations/brazil (Dated April 4, 2025)
  21. https://shuftipro.com/guides/kyc-compliance-regulations/ (Dated May 14, 2025, general KYC/AML context)
  22. https://www.jinse.com/blockchain/3705917.html (Dated June 21, 2025, original likely in Chinese, refers to English sources for Brazil tax changes)
  23. https://learn.bybit.com/crypto-regulation/brazil-crypto-regulation-central-bank-plans/ (Dated June 24, 2025, appears to be an update or similar to source)
  24. https://bnnbreaking.com/finance-nav/brazil-launches-nationwide-crypto-tracking-to-fight-fraud-and-money-laundering (Dated June 20, 2025)
  25. https://www.ainvest.com/news/brazil-imposes-17-5-flat-tax-on-all-crypto-gains-ending-exemptions-01HYAYKFVZKWJ7X8W9P0X72Q3F/ (Dated June 15, 2025)
  26. https://www.binance.com/en/square/post/5305919007427 (Dated March 9, 2025)
  27. https://news.bitcoin.com/best-crypto-exchanges-in-brazil/ (General guide, refers to 2025)
  28. https://www.feijolopes.com.br/en/crypto-assets-brazilian-sec-revokes-stop-order-against-crypto-brokerage-firm/ (Dated March 31, 2025, discusses CVM's stance on specific token types)

Web Sources (20)

Sources discovered via web search grounding

Search queries used (8)
  • Retail cryptocurrency trading Brazil regulation status 2025
  • Brazil cryptocurrency laws and regulations for individuals 2025
  • Central Bank of Brazil cryptocurrency regulation 2025
  • CVM Brazil cryptocurrency retail trading 2025
  • KYC/AML requirements Brazil cryptocurrency exchanges 2025
  • Taxation of cryptocurrency Brazil for individuals 2025
  • Official statements Brazil government cryptocurrency retail trading 2025
  • History of cryptocurrency regulation in Brazil
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