⚠️ Brazil 🇧🇷: The Regulator Tackles Economic Impact and Stablecoins

⚠️ Brazil 🇧🇷: The Regulator Tackles Economic Impact and Stablecoins

With the devaluation of the real and the growing interest in stablecoins like USDT for international transactions, efforts to "escape inflation" persist.

BRICS payment plans⁉️
Control local stablecoin users? That seems to be the goal.

▶️ Real Devaluation
Recently, the real was labeled the worst-performing currency of 2024, with a 20.64% drop. Currently, that figure has risen to 23%, increasing import costs and fueling public frustration.

▶️ Government Response
Brazil is participating in the development of the “BRICS Bridge Platform”, a cross-border payment system based on blockchain, wholesale central bank digital currencies (CBDCs), and local currencies. The primary goals are:
🟡Reducing dependence on SWIFT.
🟡Lowering the use of the dollar in international trade.

If successful, this system could even limit interest in stablecoins like USDT within the BRICS bloc.

▶️ Challenges Ahead
President Lula did not attend the announcement in Kazan due to health issues, raising questions about the project's progress. Meanwhile, the Central Bank of Brazil has taken a more radical stance, proposing a ban on stablecoin withdrawals to self-custody wallets like MetaMask.

▶️ Proposed Regulations

🟡The new framework includes:
🟡Crypto payments.
🟡Storage and sales of foreign currencies.
🟡Currency-related operations.

Additionally, VASPs (Virtual Asset Service Providers) will be required to provide the Central Bank with detailed customer and transaction data. The final approval of these measures will be discussed on February 28, 2025.

Conclusion

Despite these restrictions, banning self-custody wallets seems technically challenging and could face resistance. Trying to combat inflation through strict regulations may not be the most effective strategy. The government may need to recognize that economies do not always respond well to rigid controls.
#news #Brazil #crypto

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