Brazilian Central Bank Releases Regulatory Rules for Bank Cryptocurrency Services

Source: PortaldoBitcoin Original Title: Central Bank Sets Rules for Banks Offering Cryptocurrency Services Original Link: https://portaldobitcoin.uol.com.br/banco-central-define-regras-para-bancos-oferecerem-servicos-de-criptomoedas/ The Central Bank of Brazil issued rules this Thursday (22nd) for commercial banks to provide cryptocurrency buying and selling services. The main point is the requirement to hire external auditors to demonstrate good practices in virtual asset asset segregation.

Normative Instruction No. 701/2026 of the BCB applies to companies described in Resolution No. 20, including: commercial banks, foreign exchange banks, investment banks, multifunction banks, Banco de Brasil Federal Savings Bank, securities companies, securities distributors, and foreign exchange brokers.

Banks wishing to provide virtual asset services (such as custody and brokerage) must obtain technical certification prepared by qualified independent companies. Brokerage is a term used by the central bank for activities such as buying, selling, and converting cryptocurrencies into local currency.

This report must demonstrate that the bank has effectively segregated virtual assets of its clients from the assets owned by the institution itself, and submit reserve proof showing that the company indeed holds the virtual assets it claims to hold on behalf of clients and users.

The document must also prove that the bank has appropriate governance and compliance structures, including risk and capital management, as well as cybersecurity policies. The regulation significantly expands the scope of technical certification and should also evaluate related service providers, including technology and cloud computing, operational capacity of third-party providers, and recovery plans in events affecting client assets.

Conclusive opinions should also demonstrate the existence of internal controls, anti-money laundering policies, and mechanisms for ongoing risk and event monitoring. The central bank may require further in-depth review of the report, which must be kept available for supervisory purposes for at least five years.

This normative instruction will come into effect on February 2, 2026, and from that date, financial institutions will be subject to the new requirements.