Four of the Brazil’s regulatory authorities namely- ‘Special Finance Secretariat of the Ministry of Economy’, the ‘Central Bank of Brazil’, the ‘Securities Commission’, and the ‘Superintendency of Private Insurance’ are planning to put in a joint effort to regulate as well as to adapt to the changing needs of the blockchain, financial, capital, and insurance sectors. In order to do this, the country’s govt. along with these four regulatory authorities, is coming up with a ‘regulatory sandbox type model.’ With this model, the aim is to harness the best results from the given sectors. There will be special attention given towards adapting to the new transformations the new industries may demand.
This new regulatory step is a step ahead after the recent regulation on cryptos by the Financial Supervision Counsel of Brazil, which happened early in this year. There are some aspects between the two regulatory steps, such as fines of $5 million on money laundering.
In the announcement by CVM, titled- “Joint Communiqué,” it was made clear that the blockchain technology, AI, i.e., artificial intelligence, and DLT, i.e., the distributed ledger technology are in support of the new proposed model. It is expected that it should raise the bar of quality and the potential of the current services and products.
These technologies are very exciting and are loaded with a lot of potentials, but the need for regulating the potential in the right direction to get the maximum results is the main objective behind this move. It is expected that the regulation should reap greater trust, confidence in trade, legal assurance, the security of the users, traders, businesses, transparency, and peace of mind with cross border interactions of all kinds. As per the announcement, the ‘regulatory regime’ would only lead to a greater development-
“It is hoped that the implementation of this regulatory regime will be able to promote the development of products and services that are more inclusive and of higher quality and that can foster constant innovation in the financial, security, and capital markets.”
Moreover, recently, it was reported that govt. of the country actively wants to have the blockchain technology, artificial technology, and other new age technologies established in all the sectors ranging from the local administration, public and private bodies.