Quick Answer
Yes, cryptocurrency is legal and regulated in Brazil.
- The Virtual Assets Act (Law 14,478/2022) provides the legal framework for crypto.
- Crypto is a recognized financial asset but is not legal tender.
Legal Status of Crypto in Brazil
Cryptocurrency is fully legal in Brazil, operating within a regulated framework rather than a legal gray area. This clear standing was established by the Virtual Assets Act, which provides legal certainty by defining virtual assets and setting guidelines for service providers. Regulatory oversight is primarily handled by the Central Bank of Brazil (BCB), with the Securities and Exchange Commission (CVM) and the Financial Activities Control Council (COAF) also playing key roles. Consequently, all virtual asset providers must adhere to strict KYC and AML compliance rules, including reporting suspicious activities to the authorities.
Current Regulations
Brazil's crypto landscape is primarily governed by Law No. 14,478/2022, known as the Brazilian Virtual Assets Law (BVAL). This legislation defines virtual assets and establishes guidelines for Virtual Asset Service Providers (VASPs), which require authorization from the Central Bank of Brazil (BCB) to operate. While the BCB is still finalizing specific rules, existing regulations require VASPs to comply with anti-money laundering (AML) and know-your-client (KYC) procedures, including reporting to the Financial Activities Control Council (COAF). Cryptoassets classified as securities fall under the separate jurisdiction of the Securities and Exchange Commission of Brazil (CVM).
Regulatory Authorities
Several key governmental bodies in Brazil share the responsibility of overseeing the country's crypto market.
- Central Bank of Brazil (BCB): As the primary regulator, the BCB is responsible for authorizing, regulating, and supervising Virtual Asset Service Providers (VASPs). It establishes the operational rules and compliance standards for crypto firms operating in the country.
- Securities and Exchange Commission of Brazil (CVM): The CVM's jurisdiction covers any cryptoasset that qualifies as a security, and it regulates their public offerings and trading. This body ensures that any tokenized securities comply with capital market laws to protect investors.
- Financial Activities Control Council (COAF): This council is Brazil's financial intelligence unit, focused on combating money laundering and terrorism financing. All VASPs must report suspicious transactions to COAF, which analyzes the data and can initiate investigations.
- Brazilian Revenue Service (RFB): As the nation's tax authority, the RFB mandates the reporting of all cryptoasset transactions for tax purposes. It is responsible for enforcing capital gains taxes on profits from crypto sales.
Historical Context
Brazil's approach to crypto evolved from early caution to a comprehensive legal framework. Initially, regulators issued warnings about risks, but a key shift came in 2019 with mandatory transaction reporting for tax purposes. The landmark moment was the enactment of the Virtual Assets Act (Law 14,478/22), which became effective in June 2023. This cryptoassets law provided legal certainty, defined virtual assets, and designated the Central Bank of Brazil (BCB) as the primary regulator for service providers. The impact has been significant, legitimizing the industry and paving the way for detailed rules from the BCB to enhance market integrity and consumer protection.
Compliance Requirements for Businesses in Brazil
Businesses operating in Brazil's crypto space must adhere to a strict set of compliance rules designed to prevent financial crimes. The framework is built on several key pieces of legislation, including Law 9,613/98 and Central Bank Circular 3,978/20. Here is a summary of the essential requirements:
- Anti-Money Laundering (AML) Checks: Companies must implement comprehensive AML programs. This involves registering and monitoring all financial transactions to detect suspicious activities. The system is built on a risk-based approach, meaning controls must be adapted to evolving threats and the specific risk profile of the business and its customers.
- Know Your Customer (KYC) Requirements: A core part of AML, KYC procedures are mandatory for customer onboarding and ongoing monitoring. Businesses must collect and verify customer information, with the CPF (Cadastro de Pessoas Físicas) number serving as a central pillar for identity verification. For high-risk clients, such as Politically Exposed Persons (PEPs), Enhanced Due Diligence (EDD) is required, which may involve verifying the source of wealth.
- Suspicious Activity Reporting: Any transaction or activity deemed suspicious must be reported to the Council for Financial Activities Control (COAF) within 24 hours of detection. This includes not just large transactions but any activity that is inconsistent with a customer's known profile.
- Record-Keeping: All customer and transaction records must be securely retained for a minimum of five years after the end of the business relationship. This is to ensure that authorities can trace funds and investigate financial activities if needed.
- Internal Controls and Training: Firms are required to establish robust internal controls, conduct regular risk assessments, and provide continuous training for employees on AML laws and threat detection.
Why this matters for Cross-Border Payments
For businesses facilitating cross-border payments between Brazil and India, these regulations introduce significant compliance burdens. Companies must harmonize Brazil's strict KYC/AML rules, centered on CPF verification and COAF reporting, with India's own financial oversight. This dual-jurisdiction complexity can create operational friction, potentially slowing down transaction speeds and increasing costs. The primary pain point becomes balancing the promise of fast, efficient crypto payments with the rigorous, non-negotiable demands of multi-national regulatory adherence.
How Lightspark Enables Compliant Crypto-Native Payments
Lightspark offers a global payments infrastructure, the “Money Grid,” built on Bitcoin to enable instant, low-cost money movement. It provides two primary access points: Lightspark Connect and Grid Switch. Connect offers native access to the Lightning Network, managing complex infrastructure like nodes and liquidity. Grid Switch, on the other hand, allows regulated institutions to leverage domestic real-time payment systems to move fiat currencies globally. Together, they bridge traditional finance with next-generation technology, creating a unified network for cross-border transactions.
This dual approach directly addresses the friction of cross-border payments by reducing settlement times from days to seconds and lowering costs. For regulated institutions navigating complex rules like Brazil's, Lightspark provides facilitating tools. Features such as audit-ready reporting, secure key management, and built-in compliance integrations for the travel rule and OFAC screening help businesses meet their regulatory obligations without stifling innovation.
To learn more about Lightspark’s solutions for instant, global payments, visit their website.
Notice: This article is provided for informational purposes only and does not constitute legal advice.
Sources
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- “CMS Expert Guide to Crypto Regulation in Brazil.” CMS, 20 June 2025, cms.law/en/int/expert-guides/cms-expert-guide-to-crypto-regulation/brazil.
- Editorial Team. “AML Compliance Guidelines: Brazil.” sanctions.io, 23 Jan. 2025, www.sanctions.io/blog/aml-compliance-guidelines-brazil.
- “KYC/PLD Compliance in Brazil: Regulatory Framework and How to Comply.” Tecalis, 11 Aug. 2025, www.tecalis.com/blog/kyc-brazil-pld-regulatory-framework-aml-coaf-cpf.
- Maia, Luiz Felipe, et al. “Blockchain & Cryptocurrency Laws and Regulations 2025 – Brazil.” Global Legal Insights, 25 Oct. 2024, www.globallegalinsights.com/practice-areas/blockchain-cryptocurrency-laws-and-regulations/brazil/.
- Mavignier, Monique, et al. “Brazil’s Legal Framework for Cryptoassets and Upcoming Regulation.” International Bar Association, 30 Apr. 2025, www.ibanet.org/Brazil-legal-framework-for-cryptoassets-and-upcoming-regulation.
- Team Sanction Scanner. “Cryptocurrency Regulations in Brazil.” Sanction Scanner, 4 July 2025, www.sanctionscanner.com/blog/cryptocurrency-regulations-in-brazil-1153.
