In a major step towards regulating the burgeoning crypto market, Brazil’s Central Bank has unveiled comprehensive rules for virtual asset service providers (VASPs). This regulatory framework establishes stringent requirements for firms operating in the country, aiming to bolster market security and combat fraud. These regulations, which are expected to take effect in February 2026, demand registration as Sociedades Prestadores de Serviços de Ativos Virtuais (SPSAVs) and set substantial capital requirements for all participating firms. The move aligns Brazil’s crypto industry with international financial norms, aiming to prevent illicit activities facilitated by the sector. The new rules introduce stricter capital requirements of up to US$11 million, compared to earlier estimates, signifying a significant shift towards robust financial oversight. This framework also addresses specific use cases for fiat-pegged stablecoins and cross-border transactions, with transfer restrictions in place for unauthorized parties capped at US$100,000. These measures aim to solidify the crypto sector by establishing clear compliance and enforcement processes, including a 9-month transition period and potential operational cessation if firms fail to comply. Brazil’s proactive approach to crypto regulation offers valuable insights into global market governance and could influence the evolution of regulatory frameworks in other jurisdictions.