- A Web3 expert claimed that Brazil demonstrates why giving the central bank control over crypto regulations is a bad idea.
Brazil is one of the largest adopters of crypto worldwide. It was also one of the earliest jurisdictions to integrate digital assets into its regulatory framework.
However, Helena Margarido, a two-time TEDx Speaker and blockchain strategist, highlighted how the country made a “strategic mistake” of handing over the reins of crypto oversight to the Banco Central do Brasil (BCB), the country’s central bank.
A Central Bank Should Not Have Control Over Crypto Rules
Margarido said Brazil just showed the world why a central bank, such as the BCB, has no business handling crypto regulation. She considered Law No. 14,478/2022, also known as the Brazilian Virtual Assets Law (BVAL), a major “strategic mistake” for the nation’s digital assets sector. What it did right, though, was establish a legal definition for crypto.
ADVERTISEMENTThe Web3 specialist argued, “Crypto is not a bank product.” So, assigning the BCB, an institution mandated to protect the Brazilian real above all else, entirely defeats the purpose of crypto, which is grounded in decentralization and financial freedom.
Margarido admitted that the measure enabled crypto users’ strict compliance with tax standards. On the other hand, she emphasized that it compromised privacy and anonymity. What’s worse, it deemed financial autonomy conditional because it gave the state power to seize crypto assets from entities that refuse to play by its rules or that compete with the real.
The blockchain strategist claimed that the central bank’s immediate access to custodial crypto exchanges is driving sophisticated users toward self-custody and decentralized alternatives. Hence, she predicted that it won’t be long until regulators will also impose more restrictions on self-hosted wallets. She stressed that Brazil is already moving toward that scenario.
ADVERTISEMENT## Locking Crypto and Stablecoins in the State’s Control
Margarido explained that the real has historically been among the most volatile currencies among emerging markets. As a result, Brazilians have turned to crypto and US dollar stablecoins to protect their wealth. It fundamentally made crypto penetration organic in Brazil, becoming the primary reason for its consistently high ranking in global crypto adoption.
In fact, Brazil established its position as the world’s fifth-largest crypto hub at Chainalysis’ 2025 Global Crypto Adoption Index Top 20. Margarido pointed out that the jurisdiction moved an estimated $318.8 billion in crypto between mid-2024 and mid-2025, with roughly 18% to 19% of Brazilians already holding crypto.
But then again, Margarido believes BVAL was the nail in the coffin for crypto innovation in Brazil. By giving the central bank the keys to its regulation, the country has effectively locked itself in a “financial-system-first approach to crypto governance,” which filtered innovations it deemed a disruptive force to the real’s use and the central bank’s monetary policy.
Overall, it guaranteed that crypto remains in the state’s oversight and control, diminishing the non-partisan, anti-censorship, and peer-to-peer nature that drew millions of Brazilians to the asset class in the first place.
ADVERTISEMENT
