Guilherme Nazar, Regional VP of Binance LATAM, and Thiago Sarandy, head of regulatory and legal affairs at the company, emphasize key points and necessary advances in public consultations from the Central Bank for the crypto market, highlighting the sector's transparency and innovation.
The executives detailed the challenges and opportunities of Public Consultations 109 and 111 of 2024. They emphasized the importance of balancing innovation with user protection and global competitiveness.
Regulation of VASPs: pathways to a safer market
Public Consultation 109, along with 110, aims to establish a regulatory framework for VASPs. Thus, defining rules for their establishment, operation, and authorization process. Additionally, CP 111, which remains open for comments until today (3), proposes guidelines for the operation of these institutions in the foreign exchange market.
Guilherme Nazar, Regional VP of Binance for Latin America, emphasizes the company's role in crafting these rules.
Binance has continuously played an active role in the development of regulation on virtual assets in Brazil and worldwide, leveraging its global know-how and the experience built over years of leadership in this sector. We hope that the final wording of the rules will take into account the specifics of this market in order to preserve market strengthening alongside user protection. Binance's contributions aim to assist in these fine adjustments, he stated.
Nazar also acknowledges the efforts of the Central Bank. 'Regardless of criticisms and areas for improvement, we recognize the Central Bank's efforts to regulate a disruptive market with global technology, placing Brazil at the global forefront of regulation of virtual assets and their respective service providers,' he said.
Regulatory challenges and perspectives of the crypto asset industry
For Thiago Sarandy, head of regulatory and legal affairs at Binance, the country stands out both in the adoption and regulation of crypto assets.
We congratulate the Central Bank for adopting a democratic and transparent approach to the regulatory process. Our main objective with our contributions is to stimulate reflection and reassessment of certain points and to contribute to the formulation of regulations that adhere to a constantly evolving and innovative market, which, first and foremost, adequately protects users, he stated.
Sarandy highlights that Binance's technical approach includes advocating for essential products for the market, such as margin, staking, and earn. Furthermore, he points out that CP 109 proposes clear conditions for the operation of VASPs, facilitating monitoring and attracting international players.
BACEN is correct to bring a clear and balanced set of rules for institutions. It is also correct to allow the hiring of services and technology from abroad. To be more effective, the regulator should deepen the concept of PSAV service provision in the country and detail how international actors can locate their operations, he said.
Another point raised is the challenge of implementing the 'Travel Rule' and the inclusion of virtual assets in the foreign exchange market. According to Sarandy, the lack of interoperability and global trading of these assets requires 'the definition of clear parameters for data sharing, interoperability, and harmonization with international standards, with crucial implementation of the tool in phases.' He also warns that the indiscriminate inclusion of stablecoins in the foreign exchange market could impose restrictions on global trading. Additionally, it could also affect the pricing of assets and impact the operations of Brazilian users.
Additionally, Binance questions the prohibition of withdrawing stablecoins to self-custody wallets, arguing that the holder should have the freedom to choose where to store their assets. 'There is a significant risk that restrictive regulation will encourage Brazilian users, especially those who trade large volumes, to migrate to entirely decentralized environments, making any centralized supervision or adequate oversight and control impossible,' Sarandy concludes.
The article 'Binance Executives Advocate for Clear and Innovative Regulation for Crypto' was first seen in BeInCrypto Brazil.