On November 29th, the Central Bank of Brazil (BCB) published the Public Consultation Notice 111 (ECP 111/24), proposing changes in the current foreign exchange regulations. BCB’s main objective is to include activities or transactions of virtual asset service providers (VASPs) and outline the scenarios in which these activities should comply with the regulations of Brazilian capitals abroad and foreign capital in the country.

BCB's proposal amends BCB resolutions 277/22, 278/22 and 279/22, providing for scenarios in which transactions with virtual assets are considered FX transactions, subject to applicable regulations.

ECP 111/24 also refers to Law 14,478/22 (Legal Framework for Cryptoassets), in particular, to item V of article 7, which grants BCB the authority to set forth the hypothesis in which virtual asset services comply with the regulations of Brazilian capital abroad and foreign capital in the country.

According to the BCB, the changes in the FX regulations aim at enhancing:

  • protection of consumers and investors;
  • cybersecurity;
  • privacy;
  • prevention of use for illicit purposes;
  • financial and market integrity; and
  • maintenance of fiscal and macroeconomic stability.

They also aim to provide legal security and enable the development of new business models.

In this context, BCB understands that business models involving virtual assets can increase efficiency and improve the quality-of-service provision in the FX market.

VASPs Transactions in the FX market


According to the draft, VASPs will be able to operate with virtual assets in the FX market, provided they request a specific license from BCB. If licensed, VASPs will be able to perform the following activities:

  • international payments or transfer of virtual assets;
  • buying, selling, exchanging or custody of virtual assets denominated in reais owned by non-residents; and
  • buying, selling, exchanging, transferring, or custody of virtual assets denominated in foreign currency.

VASPs engaged in these activities may do so provided that each transaction has an equivalent value of up to USD 100,000 or the equivalent in other currencies. This limit aligns with the current limit assigned to payment institutions licensed to operate in the FX market.

According to ECP 111/2024, securities brokerage firms (CTVM), securities distribution firms (DTVM), FX brokerage firms, credit, financing and investment companies, and development agencies will also be able to perform the above-mentioned activities with virtual assets in the FX market. In such a case, international payments or transfer with the transmission of virtual assets must be limited to an equivalent value of USD 500,000, or the equivalent in other currencies.

However, Public Consultation Notice 109 (ECP 109/24), does not include credit, financing, and investment companies (the so-called financeiras in Portuguese) and development agencies (agências de fomento in Portuguese) in the list of entities that may operate with virtual assets. It is not clear how both regulations will work together – this discussion remains open.

BCB further defines international payments or transfers with the transmission of virtual assets as:

  • The payment or transfer whose settlement occurs with the transmission of virtual assets between a resident and a non-resident or between non-residents; and
  • the transmission of a virtual asset owned by the same client between the country and abroad.

The concept of international payment or transfer of virtual assets does not include the transmission of a virtual asset resulting from an acquisition whose payment occurs by FX transaction or by means of transfers in the non-resident account in reais – including the provision of eFX services.

Procedures for the Transfer of Virtual Assets

BCB has outlined procedures for international payments or transfers made with virtual assets. These operations may occur with:

  • change in the ownership of virtual assets held in custody at VASP itself;
  • sending or receiving virtual assets to another VASP responsible for the custody of the virtual assets of the counterparty; and/or
  • sending or receiving virtual assets to the service provider authorized abroad responsible for the custody of these virtual assets in the jurisdiction of origin or destination.

In the case of sending or receiving virtual assets by means of a virtual asset service provider licensed by a regulator abroad, the VASP licensed by BCB must ensure that the service provider licensed abroad is subject to prudential and conduct supervision in its respective jurisdiction or is part of a financial group subject to effective consolidated supervision.

BCB has prohibited the transfers of third-party funds through the provision of virtual asset services in the FX market. Theses transfers are allowed if the recipient of the service provided by the VASP is another institution licensed to operate in the FX market, acting on behalf of its clients.

Stablecoins and Limitations on the Transfer of Virtual Assets

The new rules proposed by BCB define virtual assets denominated in reais or foreign currencies as those that, respectively:

  • are considered stable virtual assets created with the purpose of maintaining their value stable in relation to the real; or
  • are considered stable virtual assets created with the purpose of maintaining their value stable in relation to a specific foreign currency.

This definition is aligned with the concept of a stable virtual asset (stablecoin) proposed in Public Consultation Notice 109/24 (ECP 109/24), which regulates the process of authorization and functioning of VASPs.

Understanding this concept is relevant for the foreign exchange sector, as the BCB limits the possibility (or not) of making payments or transfers, depending on the type of currency reserve, whether it be the real or a specific foreign currency.

More specifically, BCB only allows the possibility of transferring virtual assets denominated in foreign currency in the following cases:

  • among residents, in the event of a legal or regulatory provision for payment in foreign currency;
  • among institutions licensed to operate in the FX market; and
  • transfer, between virtual asset service providers, of virtual assets denominated in foreign currency owned by the same client.

Furthermore, BCB suggests that VASPs should ensure that non-resident clients who conduct purchases, sales, exchanges, or custody of virtual assets in reais do so on their own behalf. Performing such operations for the benefit of third parties is prohibited.

Purpose of the FX Transactions

In case of international payment or transfer through virtual assets, VASPs must obtain information from the client regarding the purpose of the payment or transfer. Additionally, it is necessary to present to BCB the codes listed in the annex of the proposed regulations. The relevant VASP must also provide guidance and technical support to the client for the correct classification of the purpose of the payment or transfer.

BCB also stipulates that the VASP must obtain information from the client about the payer or recipient abroad and their relationship with the client.

Licensing Process

The amendments proposed by BCB in the FX regulation state that the activities listed in the specific title of virtual assets of BCB Resolution 277/22 (the most important FX rule) can only be carried out by VASPs licensed to operate in the FX market.

To operate in the FX market, the VASPs must request a specific license from BCB, along with the license to operate as a VASP, under the same conditions and deadlines provided for in the specific regulations.

Until the conclusion of their licensing process, VASPs may perform the following activities in the FX market (only):

  • Purchase, sale, exchange, or custody of virtual assets denominated in reais owned by non-residents; and
  • Purchase, sale, exchange, or custody of virtual assets denominated in foreign currency.

Foreign Credit, Foreign Direct Investment (FDI) and Brazilian Capital Abroad

The draft also changes BCB Resolutions 278 and 279 and sets forth different regulatory regimes for foreign credit transactions, foreign direct investment (FDI), and Brazilian capital abroad.

The changes proposed by the BCB explicitly include that the activities and operations of VASPs, when carried out for investment purposes, must comply with the regulations of foreign capital in the country and of Brazilian capital abroad, as applicable.

Other Inputs Desired by BCB

BCB also seeks inputs of the public on the following topics:

  • The need to establish additional capital limits for VASPs, other than those in the normative proposal, for the provision of virtual asset services in the FX market;
  • Mechanisms that could be employed to obtain the equivalent value in sovereign currency (reais or US dollars) of the virtual assets transacted;
  • Criteria for VASPs to verify whether their counterpart service providers abroad are subject to regulations and supervision in their jurisdiction;
  • In what aspects the regulation of foreign capital in the country and Brazilian capital abroad, including credit transactions, should encompass transactions with virtual assets for investment purposes, either as an asset class or as a form of intermediation (e.g., loans in/of virtual assets, payment in kind involving virtual assets, among others);
  • The role of VASPs in carrying out transactions of international capital flows and stocks, including non-resident investment in portfolio operations (for example, performing the role of representative).

Other Topics Covered by ECP 111/24

In addition to the above-mentioned aspects, the regulatory proposal submitted by the BCB for public consultation also addresses the following topics:

  • The duty of VASPs to inform clients about their responsibilities as virtual asset service providers, the nature, and the conditions of the services provided.
  • The implementation of specific processes to verify the origin of virtual assets transmitted from self-custodied wallets belonging to non-residents.
  • The sharing of information related to conducted operations, in the format set forth by applicable regulations.
  • The prohibition for VASPs to transfer virtual assets to self-custodied wallets held by non-residents.
  • The prohibition of transferring virtual assets denominated in foreign currency to self-custodied wallets.

Next steps

ECP 111/24 will be open for public comments until February 28, 2025. The draft is available at Participa + Brasil Portal, with a link available on the website of the Central Bank of Brazil. Interested parties can submit suggestions and comments through the links mentioned and the e-mail This email address is being protected from spambots. You need JavaScript enabled to view it..