Crypto regulation could usher in a new phase of market concentration in Brazil. As virtual asset service providers adapt their structures to the requirements of the Central Bank, industry participants estimate that approximately ten companies could obtain licenses. This scenario raises questions about smaller operations’ ability to remain in business and the effects of this reorganization on competition.

However, the estimate of ten authorizations is not an official forecast by the Central Bank. The material presented to the press mentions an earlier expectation of approximately one hundred applications. In addition, applying for authorization and obtaining a license are different steps, so care is needed when comparing the figures and assessing the future size of the market.

For Paulo Portuguez, a law graduate with research on cryptoassets and a consultant at CQM Advogados, the cost of compliance helps explain this trend. According to him, larger companies can more easily absorb investments in capital, technology, auditing, and governance. Smaller operations, meanwhile, need to assess whether their revenues can support the entire required structure.

In the specialist’s view, the challenge goes beyond initially meeting the requirements. Service providers also need to maintain internal controls, train administrators, and demonstrate operational capacity on an ongoing basis. Therefore, the challenge involves funding a permanent compliance structure, even when the volume of business does not yet generate enough revenue to cover these expenses.

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