For nearly a decade, Brazil's Central Bank approached crypto with skepticism, issuing warnings about volatility and unsupervised operators rather than rules for how the market should function. That posture has since given way to one of the most detailed virtual asset regulatory frameworks in the world. This shift was the subject of a recent fireside chat moderated by Marcos Rocha, Partner at Veirano Advogados, featuring Nagel Paulino, Head of Unit at the Central Bank of Brazil, alongside Jason Jiang, Chief Business Officer of CertiK. Here are the key takeaways from the discussion.
From Warning Letters to Federal Law
Rocha opened by laying out the timeline. In 2013, the Central Bank issued its first communiqué, flagging the volatility, lack of convertibility, and risk associated with virtual currencies. In 2017, at the height of the ICO boom, a second communiqué doubled down, reiterating that crypto assets weren't issued or backed by any monetary authority and that companies in the space weren't supervised by the Central Bank. It also drew a hard line, requiring any cross-border transactions involving crypto to go through institutions authorized to operate in Brazil's FX market.
The real shift came in 2022, when Brazil enacted Federal Law 14.478, establishing a legal framework for virtual assets. The law didn't name a regulator, since that authority sat outside Congress's jurisdiction, so in 2023, an executive decree formally designated the Central Bank as the regulator and supervisor of virtual asset service provision. From there, the Central Bank ran public consultations (including Consultation 38, addressed directly to market participants, and later Consultations 109, 110, and 111) which became the basis for Resolutions 519, 520, and 521, enacted in November 2025 and now Brazil's operative VASP framework. In just over two years, Brazil moved from "is crypto legal at all" to a detailed operational rulebook.
Building the Framework Through Dialogue
Paulino described the process as far less linear than the timeline suggests. "It wasn't a very harmonious, continuous line; it was a genuinely challenging process on the Central Bank's side," he said. What pushed it forward was the market itself: "Even though this is a market that was born with pretty libertarian ideological positions, at some point the institutions already regulated by the Central Bank, and the native institutions of this segment, started coming to us to ask for defined rules so they could operate in the Brazilian environment without predators showing up in the market. That posture from the market side, and our posture of receiving those requests, is what led to the result we have now. Not perfect, but what we have."
He pointed to international benchmarks — European and Japanese regulation, along with guidance from the Financial Stability Board and the FATF — as key references in drafting the earliest rules. One of the more complex design choices, he said, was creating a separate communication process for regulated institutions versus specialized entities, a distinction driven by the Central Bank's operational capacity to handle new institutions with a meaningful degree of sophistication. That separation also shaped a broader design decision: rather than letting institutions self-adjust in isolation, the framework built in a transition window where institutions work through intermediaries who understand custody policy, cybersecurity, and risk management before reaching the Central Bank directly.
A Regulator Jiang Can Contact Directly
Asked for an outside, cross-jurisdictional view, Jiang didn't hedge. "The Brazilian Central Bank is doing a great job because they're leading on innovation and putting a lot of detail into the regulations for the Brazilian market. Some people give feedback that it's a lot of detail, but I see it more positively. It really lays out a clear path for how to get regulated." He tied that detail directly to CertiK's own work: "Part of the security services we provide are compliance services — helping our clients stay compliant. That's crucial for mass adoption and institutionalization."
He also made the case for Brazil specifically as a market built for digital assets: a large, resource-rich economy with a substantial underbanked population, all of which raises the stakes for getting the framework right.
But the moment Jiang returned to more than once was the access itself. "This is the most surprising but also inspirational aspect I've gotten from the Brazil market. I'm able to contact Paulino through email on some of these discussions. This isn't happening anywhere else, and it's so special. I'd encourage this kind of clear communication to keep happening all the time." Paulino agreed it was unusual even by his own standards: "This really is a unique characteristic of the Central Bank. It's open, it communicates and discusses with the market. I've been in a lot of those meetings myself."
Knowing When to Stop Regulating
Paulino was candid about what surprised him once the rules actually took effect, starting with the market's reaction. "The reception was very favorable. I was honestly surprised. I thought we'd take a lot of heat," he said. He also described a deliberate choice to scale back ambition rather than chase completeness. "If we'd designed it the way we originally intended, it never would have ended. MiCA, for example, is monumental: the size of the world. We'd have gotten to at least 200 provisions. And that's a problem too. Over-regulation creates its own difficulties. So we had to systematize things better and leave some pieces more concise, just to get started."
Staking was one area where that restraint showed up directly. The Central Bank had planned to move further on staking rules in the first pass, he said, but recognized the topic warranted denser, more careful regulation on its own, so it held back and let the parallel BaaS-related regulation develop first, with the two expected to connect later.
What Comes Next: Tokenization, FSAP, and the Rails of Finance
Closing out, the conversation turned to whether capital markets infrastructure will eventually migrate to blockchain rails. Paulino pointed to Brazil's recent FSAP evaluation — conducted with the IMF and World Bank, one of the first of its kind to include a dedicated discussion of virtual assets — as evidence that convergence is already underway. Financial institutions are shaping products around tokenization and other digital opportunities. But he cautioned that the Central Bank can only move as fast as its legal mandate allows. "If the legislation doesn't define that authority and we go beyond it, we commit an offense as an agency," he said. Progress, in his view, will track institutional readiness, rather than move at the speed the market would prefer.
Jiang was more direct about the destination, if not the timeline. "At least 70% of large institutions already have some digital asset initiative underway, some five years into development," he said. "I think adoption of blockchain technology is inevitable. What the final form looks like — private chain, public chain, how tokenization shakes out — isn't fully determined yet. But it will happen."
Rocha closed with the stakes for the region: a well-regulated Brazil can set the benchmark for Latin America and signal to global players that the region is serious about compliance and ready for institutional-grade digital assets.
