Brazilian Financial Authorities Announce Regulatory Sandbox For Blockchain

Four of Brazil's major financial authorities have come together to regulate emerging technologies, including blockchain.

Superintendent of Private Insurance recently announced their intention to adapt new regulations to manage fintech and cryptocurrency advances.

The regulations will affect Brazil's securities, financial, and capital markets, according to the regulators.

The institutions will also create a regulatory sandbox in the hopes of understanding and allowing concessions for new fintech ideas.

The increasing commercial activity surrounding new technologies is the main reason behind the regulatory sandbox initiative.

In the case of blockchain, the Secretary of Treasury talked about the utility of DLT in Brazil's financial markets.

The new regulatory initiative comes after the announcement of regulation on cryptocurrencies earlier this year by the Financial Supervision Counsel of Brazil.

As regulatory efforts defining the limits of cryptocurrency and blockchain technology use in business, an increasing number of Brazilian merchants that work with cryptocurrencies still lack proper classification in the financial market.

The lack of recognition by financial entities sabotages the growth of the blockchain and cryptocurrency, keeping new businesses from properly participating in the fintech space.

Representatives in the field pointed out that despite regulations, banks still can close or deny bank accounts to businesses that work with new, untested financial technologies.