The President of the Central Bank of Brazil said that there has been a significant increase in cryptocurrency adoption in the country and that they plan to react to this by tightening the regulation of digital assets.

In his speech to the Parliamentary Committee on Finance and Taxation on September 27, Roberto Campos Neto reported on the increase in Brazilians' "importation of cryptocurrencies." According to the central bank's data, cryptocurrency imports increased by 44.2% between January and August 2023, reaching 35.9 billion Brazilian reais ($7.4 billion) compared to 2022.

Neto also noted the popularity of stablecoins, especially those used for payment purposes. He said the bank will respond to these trends by tightening regulations and bringing crypto platforms under its control. He noted that crypto-related issues could be linked to tax evasion or illegal activities:

“We understand that a lot is linked to tax evasion or linked to illegal activities.”

Brazil gave the main role in crypto regulation to the Central Bank in June 2023. However, token projects that qualify as securities remain under the Comissão de Valores Mobiliários (CVM), the Brazilian Securities and Exchange Commission (SEC) equivalent.

The Central Bank of Brazil is also working on its own digital currency, Drex. In August, it unveiled the central bank digital currency (CBDC) brand and logo. In a previous discussion, Brazilian blockchain developer Pedro Magalhães reported that he had discovered functions in the Drex code that would allow a central authority to freeze funds or reduce balances.