On June 14, 2023, the Presidential Decree No. 11,563 of June 13, 2023 (Decree No. 11,563/23) was published in the Official Gazette of the Federal Executive, regulating the Federal Law No. 14,478 of December 21, 2022 (Federal Law No. 14,478/23), which consists in the denominated “Legal Framework of Virtual Assets” in Brazil.
In summary, Decree No. 11,563/23 establishes the Brazilian Central Bank as the competent authority to regulate the provision of virtual assets services, as well as to regulate, authorize and supervise the providers of virtual assets services.
The Decree No. 11.563/23, which was jointly issued by the President of Brazil, the Finance Minister of Brazil and the President of the Brazilian Central Bank, defines, in the terms of the Federal Law No. 14.478/23, the Brazilian Central Bank as the body of the Federal Public Administration responsible for (i) regulating the provision of virtual assets services, as well as (ii) regulating, authorizing and supervising the providers of such virtual assets services.
There is no deadline set for the Brazilian Central Bank to issue specific regulations on the subject. However, it is expected that it will happen soon, considering the entry into force of the Decree No. 11.563/23 as of June 20, 2023.
It must be emphasized that the provisions of the Decree No. 11.563/23 do not alter the competencies (i) of the Brazilian Securities Commission with regard to assets representing securities (subject to Federal Law No. 6,385, of December 7, 1976), or (ii) of prevention and repression of money laundering and financing of terrorism crimes, defined in Federal Law No. 9,613, of March 3, 1998.
Please note that, for purposes of the Federal Law No. 14,478/23, it is considered:
(i) “Virtual asset” the digital representation of value that can: (i)(a) be traded or transferred by electronic means; and (i)(b) be used for payments or for investment purposes (excluding domestic currency, foreign currencies, electronic money, points and rewards of loyalty programs, securities, and financial assets); and
(ii) “Virtual asset service provider” means a legal entity that performs, on behalf of a third party, the exchange of virtual assets for domestic or foreign currency, the exchange between virtual assets, the transfer of virtual assets, the custody or administration of virtual assets or of instruments that provide control over virtual assets, and/or the participation in financial services and provision of services related to the offer or sale of virtual assets by issuers.