Brazil has finalized a comprehensive regulatory framework for crypto companies, aligning them with traditional financial institutions. This move marks a major step towards integrating digital assets into the country’s formal financial system while increasing oversight on stablecoin transactions and wallet transfers. The new rules, published by Brazil’s central bank (Banco Central do Brasil), establish operational and licensing standards for ‘Sociedades Prestadoras de Serviços de Ativos Virtuais’ (SPSAVs)—legal entities authorized to operate within the country’s crypto space. These regulations extend existing frameworks on consumer protection, transparency, and anti-money laundering (AML) to cover brokers, custodians, and intermediaries in the crypto industry.** The rules take effect on February 2, 2026, with mandatory reporting on capital market and cross-border operations beginning May 4, 2026. A key development is the classification of stablecoin transactions as foreign-exchange (FX) operations, including purchasing, selling, or exchanging fiat-pegged digital assets and international payments. This classification will subject these activities to the same documentation and compliance standards as cross-border currency transfers. Licensed FX institutions and new SPSAVs are authorized to perform these operations but with a cap on transactions of $100,000 for those not licensed by banks or government entities. **The rules also address self-custody wallet transfers, requiring identification verification from both sender and receiver when conducted through regulated service providers**, enhancing transparency even within the country’s borders. While self-custody remains legal, exchanges and brokers must now treat these wallet interactions as regulated FX activities. **This framework addresses significant challenges posed by stablecoin activity in Brazil,** which make up 90% of the country’s crypto market, primarily for payment purposes. This makes money laundering controls and taxation more complex. The BCB has stated that these measures aim to bring greater transparency and legal clarity to this evolving segment. **While providing a clear regulatory framework for the industry,** the new rules may increase compliance burdens for smaller firms and force them to meet banking-level operational standards. **Larger institutions, however, could benefit from the clearer regulatory environment and attract more institutional capital.**