Crypto associations pressure the Central Bank for sector regulation adjustments with a manifesto and judicial reaction

Source: PortaldoBitcoin Original Title: Cryptocurrency associations pressure Central Bank for sector rule adjustments with manifesto and judicial reaction Original Link:

Central Bank regulation provokes reactions from the crypto sector

The Central Bank’s new rules for the cryptocurrency market continue to advance but are already provoking significant reactions from the entities representing the sector. Associations such as ABcripto and ABToken state that they support the creation of a clearer and safer regulatory framework but warn that some points, especially related to prudential requirements and taxation, could have the opposite effect of what is desired, such as market concentration, reduced competition, and increased judicialization.

Debate on minimum capital requirements

One of the main debate points involves the rules for minimum capital and minimum net worth applicable to Virtual Asset Service Providers (SPSAVs). The new framework from the Central Bank, announced at the end of last year, adopts a logic based on activities, predicting different levels of requirements depending on the type of service provided, such as intermediation, custody, or movement of third-party assets.

Although recognizing progress in this model, the Brazilian Association of Tokenization and Digital Assets (ABToken) sent a technical manifesto to the Central Bank warning that the current calibration could, in practice, result in disproportionate requirements.

According to the entity, the combination of criteria set out in the norms could lead to capital levels exceeding R$10 million even for business models that do not involve significant credit risk or custody of assets. In the association’s view, this tends to raise entry barriers, favor large groups, and encourage companies and users to migrate to unregulated environments.

“Our goal is not to reduce regulatory rigor but to ensure proportionality. Very high capital requirements at the initial stage of the regulatory framework can inhibit innovation, reduce competition, and paradoxically, push operations outside the regulated perimeter,” says Regina Pedroso, executive director of ABToken.

The document also points out possible regulatory asymmetries, highlighting that traditional financial institutions that engage in activities with virtual assets may, in some cases, be subject to lower capital requirements than those imposed on SPSAVs, even when performing similar custody and intermediation scopes.

Similarly, the Brazilian Association of Cryptoeconomics (ABcripto) states that, on this topic, it understands “that prudential reinforcement is a legitimate goal but assesses that these rules need to be proportional.”

“The crypto assets market is diverse, with companies of different sizes and business models, and very high or uniform rules can end up restricting competition, stifling innovation, and concentrating the market,” said the association.

Proposals for a phased regime

Among the proposals presented, ABToken advocates adopting a phased regime, including the creation of a category of “reduced-size SPSAV,” with clear operational limits, proportional governance requirements, and capital compatible with the actual risk assumed.

The entity also requests that the application of the new requirements to existing companies be gradual, respecting the transition period provided in the Central Bank’s own norms and aligning with international experiences.

Controversy over IOF on cryptocurrencies

Another sensitive point of the new regulatory environment involves the possible taxation of crypto assets through the Financial Operations Tax (IOF), especially in operations with stablecoins. ABcripto’s president has already signaled that the entity may react judicially if the government proceeds with collection via decree, without broader legislative debate.

In a statement, ABcripto recognizes the importance of clear rules to provide legal certainty to the sector and users but emphasizes that stablecoins cannot be equated with fiat currencies. “The very Legal Framework for Crypto Assets makes it clear that virtual assets are not to be confused with national or foreign currencies,” states the association. For the entity, treating stablecoins as foreign exchange operations for tax purposes creates an interpretation that exceeds what is provided in the law.

The association also highlights that the inclusion of certain crypto operations in the foreign exchange market by the Central Bank was for regulatory, monitoring, and supervisory purposes, not to create a new taxable event.

Furthermore, ABcripto recalls that there is already “IOF incidence at specific points of the ecosystem, such as in the process of issuing (minting) stablecoins, which only occurs when there is an actual conversion of traditional currency into the issuer’s reserves.”

For ABcripto, any change that broadens the incidence of IOF on crypto assets should go through Congress, preferably via a complementary law, ensuring predictability and legal security. The association also states that it closely monitors the regulation conducted by the Central Bank and the Ministry of Finance and advocates that both prudential and tax requirements consider the actual risk of each activity, include transition phases, and be developed in dialogue with the sector.