Crypto actors see the ban proposal, spearheaded by the Central Bank of Brazil, as excessive and explain that this move might push companies to operate offshore. An alternative proposal that substitutes the proposed ban with a reporting system was also recently floated.
Exchanges Say Stablecoin Self-Custody Ban Proposal Could Push Crypto Offshore in Brazil
The proposal to ban the withdrawal of stablecoins to self-custody wallets in Brazil is getting heat from exchanges, which see this measure as excessive. Exchanges like Binance have been working with the central bank for months to propose alternatives that alleviate the government’s concerns while avoiding the establishment of such a ban.
Binance is one of the exchanges advocating for a system that allows exchanges to report customers’ movement and transactions, avoiding the need for a total ban.
Thiago Sarandy, Binance’s regulatory legal head for Brazil and El Salvador, has stated that due to the properties of blockchain, this could be effective if the central bank establishes a partnership with blockchain analysis companies to determine the destiny of the funds in each transaction.
This could, in consequence, help the anti-money laundering and tax evasion efforts that the central bank is advancing in this regard. “The central bank should completely remove this prohibition and put some kind of reporting in place to be able to track the transaction,” he stressed.
Cesar Carvalho, partner at Baptista Luz Advogados, highlighted that they had been talking to the central bank about the consequences of enacting the proposal as is, commenting that it could affect constitutional warranties. He declared:
“A total ban like this is disproportionate and very excessive. Self-custody and the principles behind it incorporate constitutional rights, such as the right to property. They are constitutive principles of our democracy.”
Finally, Guilherme Sacamone, head of OKEx in Brazil, noted that this measure could push exchanges out of the country. “You only hit those who are trying to work within the rules,” he concluded.
Gabriel Galipolo, the current president of the Central Bank of Brazil, has linked crypto with illicit activity, stating that people use it to maintain “some kind of opaque vision for taxation or for money laundering.”
Read more: Central Bank of Brazil Links Stablecoin Growth to Tax Evasion and Money Laundering