Brazil's central bank reclassifies VASPs as Type 3 institutions, matching securities brokerage rules. Segment 4 inclusion by 2028. Industry expects consolidation.
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Brazil's central bank is tightening the rules on crypto companies. On Wednesday it issued Resolution No. 580/2026, amending earlier resolutions to classify virtual asset service providers (VASPs) and conglomerates led by them as Type 3 institutions.
Type 3 previously grouped securities brokerages, securities distribution firms, and foreign exchange brokerages. Now VASPs join them, subject to the same prudential requirements: risk management rules, capital requirements, and information disclosure policies. The change takes effect January 1, 2027.
The bank said the classification "brings the regulatory treatment of these companies closer to that adopted for brokerage and securities distribution firms, reflecting functional similarities between their business models." It follows the "same activity, same risk, same regulation" principle.
By June 30, 2028, VASPs will also be included in Segment 4 regardless of size. Segment 4 groups institutions whose size is less than 0.1% of Brazil's GDP. The resolution prevents VASPs from receiving Segment 5 benefits, a simplified compliance regime for low-risk-profile institutions.
"With this initiative, the Central Bank is advancing in building a safe and proportionate regulatory environment for the development of activities with virtual assets in Brazil," the bank said.
Valor Económico reported the measure was not well received by crypto industry executives, who expect more consolidation. "It doesn't seem to make much sense in terms of 'same risk, same regulation'. The positive thing is that it only comes into effect in 2027, so we have time to adjust," an unidentified executive said.
The central bank will next design a regulatory framework for institutional VASPs, defined as organizations that operate with virtual assets at a scale that warrants additional oversight. No timeline has been set for that framework.
For traders and firms operating in Brazil, the practical effect is a two-year runway to meet capital and reporting standards that mirror those of traditional securities firms. The exclusion from Segment 5 means even small VASPs cannot rely on lighter compliance. The consolidation the executive cited is likely to accelerate as smaller players face the cost of compliance without a simplified path.
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