The International Monetary Fund has called for stronger oversight of Brazil’s digital asset market, warning that growing crypto activity and stablecoin adoption are creating new regulatory challenges.
The comments were included in the IMF’s latest Financial System Stability Assessment (FSSA) for Brazil, which highlighted the increasing role of digital assets within the country’s financial system.
Brazil’s crypto market, particularly around US dollar-pegged stablecoins, has expanded significantly in recent years, with cross-border crypto flows growing faster than traditional capital flows and nominal GDP.
The report noted that stablecoin purchases are two to three times more sensitive to global market shocks than traditional portfolio investments, with external factors such as market volatility, Bitcoin prices and wider investor sentiment influencing activity.
While the IMF recognised the contribution of digital assets to Brazil’s evolving financial ecosystem, it highlighted several areas where regulatory frameworks require further development.
These include stablecoin issuance, customer asset protection, anti-money laundering and counter-terrorist financing requirements.
The Fund acknowledged steps taken by the Banco Central do Brasil to strengthen oversight of crypto asset service providers but recommended further measures to align Brazil’s regulatory approach with international standards from organisations including the Financial Stability Board and the International Organisation of Securities Commissions.
The IMF said that while systemic financial stability risks linked to crypto assets remain contained, the continued growth and increasing connection between digital assets and traditional finance mean enhanced monitoring will be needed.
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