Federal Government publishes Decree 11,563/2023, which regulates the Legal Framework for Virtual Assets in Brazil

With the purpose of regulating Law No. 14,478, of December 21, 2022 (“Legal Framework for Virtual Assets”), the Federal Executive issued Decree No. 11,563, of June 13, 2023 (“Decree”).

In line with market expectations, the Decree assigned to the Central Bank of Brazil (“BC”) the attribution of regulating and supervising the so-called virtual asset service providers (“VASPs”) and their activities, without, however, changing any aspect of competence of the Securities and Exchange Commission (“CVM”) nor providing for assets representing securities (security tokens) subject to the regime of Law No. 6,385/76.

The Decree kept other competences attributed in specific legislation unchanged, such as those related to the National System of Consumer Protection and the prevention and repression of money laundering.

As the regulator of the Brazilian virtual asset market, the BC is expected to standardize several aspects relevant to the regulation of the sector and, thus, initiate the issuing of rules that deal with the requirements for the constitution and operation of VASPs. In any case, a minimum period of 6 months must be observed for entities that are currently in operation to adapt to the new rules, in accordance with the provisions of the Legal Framework for Virtual Assets.

The Decree will enter into force on June 20, 2023, together with the Legal Framework for Virtual Assets, and is available for access on the Planalto website.

Our Banking and Finance team is available to assist our clients and partners with any clarification on this matter and other related topics.