Crypto regulation advances with PL 4.932/2023 and can unlock investments in Brazil, says ABToken

The Brazilian Association of Tokenization and Digital Assets (ABToken) presents its Strategic Report on the Bill 4,932/2023, highlighting the decisive role of the proposal in the institutional consolidation of the virtual asset market in Brazil. According to the entity, the country is going through a tipping point in the development of the digital financial system, requiring an urgent modernization of the legal framework.

Thus, the document positions the bill as a structuring framework for the sector, filling critical gaps left by current legislation and aligning Brazil to the best international governance practices.

The proposal, already approved by the Chamber of Deputies and currently being processed in the Federal Senate, amends central provisions of the Legal Framework for Cryptoassets (Law no. 14.478/2022) and Law no. 13.506/2017. It also has significant support from different sectors. Entities such as CNF, Febraban, Anbima and other associations of the financial system, which have expressed favorable positioning, highlighting the importance of the measure for the integrity of the market and government bodies, including the Central Bank and the Ministry of Finance, also reinforce the need for approval of the proposal to ensure effective protection of the investor, especially in scenarios.

In addition, the report points out that PL 4,932/2023 follows the same direction as regulations adopted in markets such as the European Union, Singapore, the United Kingdom and Japan, especially with regard to fiduciary protection and asset segregation. This alignment positions Brazil as a safer and more competitive jurisdiction on the global stage, reducing legal uncertainties and expanding the flow of international capital.

Advancement

The main advance brought by the project is the obligation of equity segregation between the assets of the platforms and the resources of its clients. In practice, this establishes that the crypto assets in custody constitute separate equity, protecting investors against the risks of bankruptcy or judicial recovery of service providers. The text also determines that financial transactions are carried out exclusively through individualized accounts in institutions supervised by the Central Bank, eliminating the use of “ bus accounts and expanding the transparency and traceability of operations.

“O PL 4.932/2023 represents a watershed. Heritage segregation is a non-negotiable pillar for investor protection and for building an environment of trust and innovation in the country”, says Regina Pedroso, executive director of ABToken.

The report rescues the context that motivated the legislative proposal, marked by large-scale fraud between 2019 and 2022, investigated by the CPI of the Financial Pyramids.The cases showed serious governance failures, especially the patrimonial confusion between companies and customers, in addition to the performance of foreign platforms without legal presence in Brazil.

According to ABToken, the approval of the project tends to raise the level of professionalization of the sector, promoting a restructuring of companies and encouraging the consolidation of the market.The entity also highlights that the measure creates the foundations for the advancement of new technological frontiers, such as the tokenization of assets in the real estate, agro-industrial and environmental sectors.

Innovations and impacts of the project:

• Patrimonial shielding: Transmutes custody into strict fiduciary service; in the event of a company collapse, the assets of users must be fully returned or transferred, not making up the bankruptcy estate.
• End of the “Contas-Onibus”: It requires currency transit to occur exclusively by individualized accounts on behalf of the end user, combating opacity and facilitating financial traceability.
• National jurisdiction: It requires that foreign platforms have a formal headquarters and legal entity incorporated in Brazil to operate, subjecting them to the supervision and execution of the Brazilian judiciary.
• Derivatives control: It prohibits the offer of derivatives linked to virtual assets without prior authorization from CVM, protecting the investor from excessive leverage.
• Global convergence: It aligns Brazil with the practices of the most advanced jurisdictions in the world, such as the European MiCA regulation and the Singapore and Japan standards.

“A equity segregation is a non-negotiable pillar of investor protection and institutional resilience.We are working with the rapporteurs and committee chairmen for Brazil to consolidate a safe innovation environment aligned with international governance standards. The definitive resolution of custody security contained in PL 4.932/2023 is the basic premise for the subsequent unlocking of other vital agendas for the country, such as tokenization in agribusiness and real estate”, concludes Regina.

Next steps

With advanced processing in the Federal Senate and strong convergence between the public and private sectors, the expectation is that the approval will happen throughout 2026. ABToken emphasizes the importance of preserving the essence of the text approved by the Chamber, ensuring a balanced transition to the new regulatory model. ABToken will continue to monitor the processing of the matter and dialogue with institutional agents to contribute to the construction of a regulatory environment favorable to innovation and legal certainty.