Brazil's Central Bank Wants to Classify Stablecoins as Electronic Monetary Instruments
In a Brazilian Congress hearing, Fábio Araújo, consultant for the Financial System Regulation Department (Denor), stressed that stablecoins have specific traits that would be better regulated if they were classified as monetary instruments instead of as digital assets.
The debate around stablecoins is taking shape in Brazil, and the central bank’s opinion offers an insight into what might happen and how these tools might be considered in upcoming regulation. In a recent hearing within the Congress’ Economic Development Committee, the central bank revealed its position, stressing that stablecoins should be considered electronic monetary instruments, a posture rejected by most of the crypto industry.
Araújo argued that stablecoins are different from other assets, such as bitcoin, and that their regulation should also differ. He claimed that digital assets, including bitcoin and ether, constitute unique assets and offer mechanisms that guarantee scarcity, transferability, and verifiability by themselves. “With stablecoins, it’s different… a stablecoin should be considered a real-world asset and, more precisely, when it presents characteristics compatible with means of payment, it should be understood as a form of monetary instrument,” he stressed.
While this opinion is not definitive or conclusive, it defines the central bank’s stance on the subject as Congress prepares to consider Bill 4308/2024, introduced in 2024 by Deputy Aureo Ribeiro to clarify stablecoin rules.
Abcripto, the Brazilian Association of Cryptoeconomics, which groups industry heavyweights like Binance, Coinbase, Fireblocks, Visa, Tether, OKX, and Ripio, has rejected this classification. The association explained that this would introduce regulatory conflicts that would affect the adoption of stablecoins in Brazil at the institutional and retail levels, and that it would detach Brazil from international regulatory trends, becoming a hindrance to virtual asset service providers (VASPs).
The bank has also recently issued a new resolution that elevates its oversight over VASPs, whose treatment will now be equalized with that of securities institutions, a move that might lead to consolidation, forcing small institutions to close their doors.