Brazil crypto licensing deadline leaves about 40 applicants, Bitcoin.com reports

Key points

• About 40 virtual asset service providers applied to the Central Bank of Brazil, against 150 to 200 expected.
• Firms that did not apply have a month from 30 October to exit the market in an orderly manner.
• From 6 November, banks and payment providers must block transactions for unlicensed crypto firms.

Brazil's crypto licensing deadline has left only a small share of the market seeking authorisation, according to Bitcoin.com News. Of the 150 to 200 virtual asset service providers expected to apply to the Central Bank of Brazil, around 40 filed requests to keep operating before the 30 October cut-off.

Tiago Severo, the crypto authority at Brazilian law firm Panucci, Severo e Nebias Advogados, told Livecoins that capital requirements are not the only barrier. He said each company must report the custody of every client to the central bank daily, prove reserves monthly, hold three years of audited balance sheets and run an auditable money-laundering prevention programme. Many smaller platforms concluded they could not sustain this, he said.

Larger players such as Binance and Itaú did file applications, which Severo said means customer funds will sit with firms that have bigger security budgets. He expects these companies to act as infrastructure providers for smaller businesses, letting mid-sized banks, cooperatives and retailers offer crypto without running their own exchange.

The central bank has up to two years to answer applications, so any firm not already in the process faces a long route into the market. From 6 November, banks and payment providers will be barred from handling transactions for providers outside the regime, cutting unlicensed firms off from the fiat system.

What to watch: The Central Bank of Brazil has up to two years to respond to the applications filed by the 30 October deadline.

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