Brazil -- Custody Regulations Regulatory Overview

Brazil regulates cryptocurrency/digital asset custody primarily through Law No. 14,478/2022 (Brazilian Virtual Assets Law or BVAL), effective June 20, 2023, which defines and authorizes virtual asset service providers (VASPs), including custodians, under oversight of the Brazilian Central Bank (BCB). Recent developments include Resolution CMN 5,280/2026, effective March 1, 2026, classifying crypto custodians as "financial institutions," imposing stricter compliance.[2][4]

Custodial License Requirements

Custodians must obtain BCB authorization as VASPs under BVAL and Decree No. 11,563/2023, which empowers the BCB to regulate, authorize, and supervise them.[4] Resolution CMN 5,280/2026 standardizes requirements to match traditional financial institutions, covering activities like safeguarding private keys and reconciling positions with distributed ledger technology (DLT).[2][4] Public Consultation No. 110 (PC No 110) proposed aligning VASP authorizations with BCB standards for banks.[4]

Segregation of Client Assets Rules

Custodians must safeguard and control instruments (e.g., private keys) enabling rights over virtual assets, maintain updated client position descriptions reconciled with DLT records, execute transfer instructions, handle asset events, and manage custody data—implying segregation from proprietary assets.[2][4] BVAL includes VASPs in anti-money laundering (AML) obligations under Law No. 9,613/1998, requiring KYC and reporting to COAF, which supports asset protection indirectly.[4]

Insurance/Bonding Requirements

Search results do not specify insurance or bonding mandates for custodians; no direct references appear in BVAL, Decree 11,563/2023, or Resolution CMN 5,280/2026.[2][4]

Cold Storage Mandates

No explicit cold storage requirements are detailed in the provided sources for custodians.[2][4]

Qualified Custodian Definitions

BVAL and related rules define custodians as VASPs providing: custody/control of virtual assets (e.g., private keys); up-to-date client position descriptions reconciled with DLT; execution/retention of transfer instructions; handling of asset events; and data management for custody. Brokers combine intermediary and custodian roles.[2][4]

Pending Custody Legislation

BVAL's accompanying regulations followed public consultations ending February 2025 and were expected soon after; as of early 2026, Resolution CMN 5,280/2026 implements key aspects, effective March 1, 2026.[2][4] No further pending custody-specific bills are noted beyond this; Law No. 15,358 focuses on seized assets for public safety, not custody operations.[1][3]

Note on regulatory references: Specific URLs were requested but omitted per response guidelines; key laws include Law No. 14,478/2022, Decree No. 11,563/2023, and Resolution CMN 5,280/2026. Search results lack details on insurance, bonding, or cold storage, indicating potential gaps addressed in full BCB texts or future rules.[2][4]