Brazil is taking another decisive step toward integrating crypto into its traditional financial system, as the country’s central bank introduces simplified and clearer rules for banks and brokerages looking to enter the digital asset market.
Central Bank Formalizes Entry Rules
The Central Bank of Brazil (BCB) has published Instrução Normativa (IN) No. 701, a new regulation detailing the requirements banks and securities firms must meet before offering crypto intermediation and custody services. The rule was published in Brazil’s official gazette on January 23, 2026, and will take effect on February 2, 2026.
Rather than creating a new framework from scratch, IN 701 operationalizes parts of BCB Resolution No. 520, issued in November 2025, by specifying communication steps, documentation standards, and certification requirements.
Certification Takes Center Stage
Under the new rules, banks must maintain active registration in Unicad, the central bank’s registry, and submit documentation through the APS-Siscom system. A key requirement is independent certification, without which the bank’s notification to the BCB is deemed ineffective-meaning the institution remains barred from providing crypto services.
Banks must hire a qualified external certifier to verify compliance with Brazil’s rules for Virtual Asset Service Providers (VASPs). That certifier must sign a declaration confirming no corporate or commercial ties to the applicant that could create conflicts of interest.
Strict Rules on Custody and Reserves
IN 701 places strong emphasis on consumer protection and prudential safeguards. Certifiers must confirm that customer funds are fully segregated from the institution’s own assets and that there is evidence of reserves covering all digital assets held for clients and for the firm itself.
The certification must individually assess whether each baseline requirement is met. It also covers operational controls common to banking supervision, including oversight of outsourced services such as cloud computing and data processing, as well as the technical and legal compliance of key suppliers, including those based abroad.
Governance, Cybersecurity, and Crime Prevention
The rulebook goes further by mandating reviews of asset recovery plans, internal governance policies, and cybersecurity frameworks, including incident response procedures. Certifiers are also required to examine controls tied to anti-money laundering, counter-terrorist financing, and proliferation-financing risks.
Market integrity is another focus. Institutions must demonstrate procedures designed to detect and prevent abusive practices in virtual asset markets. If the BCB finds gaps, it can request additional explanations or documentation from certifiers.
Transparency Obligations for Customers
IN 701 also strengthens disclosure requirements. Certifiers must verify that banks clearly inform customers about the nature of crypto services offered, support channels, key third-party providers, custody processes, and whether guarantee funds or insurance apply.
Institutions must also explain blockchain-specific risks, the characteristics of each virtual asset, and the terms and risks associated with staking operations. To support ongoing supervision, certifiers are now required to retain working papers and memos for five years, expanding the BCB’s review capacity.
A Faster Path Into Crypto
According to Isac Costa, professor and director of the Brazilian Institute of Technology and Innovation (IBIT), the new rules significantly shorten the timeline for banks entering crypto. Speaking to Valor Econômico, Costa said institutions may begin offering services 90 days after notifying the central bank, provided they secure independent certification confirming full compliance.
While IN 701 does not specify which firms can act as certifiers, Costa expects auditors with crypto expertise to fill the role, noting that the central bank is likely to clarify this point given the importance of certifiers in the process.
Balancing Speed and Oversight
Brazilian banks and brokerages have shown growing interest in offering crypto trading and custody to retail investors. The BCB’s approach shifts part of the initial verification burden to external experts, while retaining the authority to review, block, or halt activities if risks emerge.
Taken together, IN 701 signals Brazil’s intent to accelerate crypto adoption through regulated banks, without loosening standards. By simplifying entry while reinforcing safeguards, the country is positioning its financial system to expand into digital assets faster-but not recklessly.
