Regulation and compliance in infrastructure for stablecoins

Stablecoins are becoming an essential pillar of financial innovation, providing liquidity, efficiency, and speed for global transactions. They enable frictionless international payments, optimize institutional financial flows, and offer a new level of predictability for business operations. However, their widespread adoption brings regulatory challenges, requiring companies to operate with strict compliance and governance.

The regulation of stablecoins has been one of the most debated topics among central banks, financial institutions, and governments, as these digital assets operate outside traditional financial systems but directly impact monetary dynamics and industry oversight. A robust regulatory approach is not just about mitigating risks—it also provides legal security for businesses and investors, enabling the sustainable expansion of this market.

In Brazil, regulation is still under development, creating an environment of both uncertainty and opportunity. Companies that proactively adopt sound financial compliance practices can stand out and ensure operational compliance even before formal requirements are established. This is the case with Lumx, which has positioned itself as an infrastructure ready to operate within global regulatory standards.

The Regulatory Landscape in Brazil and Worldwide

Stablecoin regulation remains fragmented, with different countries adopting varying approaches to these assets. While some markets have already established clear rules—such as the European Union with MiCA (Markets in Crypto-Assets Regulation)—others, like the United States and Brazil, are still refining their guidelines and conducting public consultations to define more precise regulatory frameworks.

Brazil: A Regulation in Progress

In Brazil, the regulation of stablecoins follows a progressive and adaptive path, guided by two key legal frameworks:

Law 14.478/2022 (Cryptocurrency Bill)

Approved in 2022, this legislation sets guidelines for the digital asset sector and its service providers. Although it does not directly regulate stablecoins, it lays the foundation for their supervision, delegating the Brazilian Central Bank the authority to regulate and oversee the cryptoasset sector in the country.

Public Consultation No. 111 by the Brazilian Central Bank (2024)

Launched on November 29, 2024, this consultation proposes changes to foreign exchange market regulations to include virtual asset service providers (VASPs) and create clearer guidelines for stablecoin operations.

Key Proposals of Public Consultation 111

• Inclusion of VASPs in the Foreign Exchange Market: Allowing companies offering virtual asset services to operate in domestic and international foreign exchange markets, increasing sector competitiveness.

• Definition of Permitted Activities: Establishing regulations on which operations VASPs can conduct, including international payments, remittances, and virtual asset-to-fiat currency conversions.

• Rules for Stablecoin Transfers: The consultation proposes restrictions on transactions between Brazilian residents using stablecoins, potentially limiting self-custody for regulatory compliance.

• Strengthened Compliance and Supervision: Requiring rigorous KYC (Know Your Customer), AML (Anti-Money Laundering), and CFT (Counter Financing of Terrorism) procedures for all companies offering stablecoin-based financial solutions.

Debates and Repercussions

The proposal has sparked discussions within the financial sector and among blockchain experts. One of the main concerns is the potential restriction on stablecoin transfers to self-custody wallets, which could impact the flexibility and freedom of users in the crypto ecosystem. On the other hand, regulation could provide legal security for companies and investors, facilitating greater integration of stablecoins into the national financial system and driving their institutional adoption.

For more details on Public Consultation No. 111 and to submit suggestions, visit the official Brazilian Central Bank portal.

The Role of Financial Compliance in Stablecoin Conformity

While specific stablecoin regulations are still being defined, companies operating in this sector must ensure their activities comply with existing financial standards.

In this context, Lumx already adopts best practices in financial compliance, ensuring adherence to regulations applicable to the banking and payments sector.

Why Financial Compliance?

Financial compliance plays a fundamental role in stablecoin operations, especially in a scenario where specific regulations for these assets are still in development. In the absence of definitive rules, Lumx adopts established financial system compliance practices to ensure credibility, security, and transparency in its operations. This approach not only strengthens institutional partnerships and mitigates risks but also prepares the organization for future regulations, positioning it competitively and responsibly in the market.

Pillars of Financial Compliance

• KYC (Know Your Customer): Rigorous processes for customer identification and verification.

• KYB (Know Your Business): Verification of the identity and legitimacy of corporate clients and business partners.

• KYP (Know Your Partner): Assessment and monitoring of suppliers and business partners to mitigate risks.

• AML (Anti-Money Laundering): Set of practices and tools to detect, monitor, and prevent money laundering activities, ensuring compliance with applicable regulations.

• CFT (Counter Financing of Terrorism): Measures and processes aimed at identifying, tracking, and blocking the financing of terrorist activities, focusing on analyzing patterns and suspicious behaviors in financial transactions.

• Transparency and Audits: Establishing internal processes to ensure security and regulatory compliance.

Compliance as a Competitive Advantage

Lumx positions itself as a reliable technological infrastructure for stablecoin payments, ensuring that businesses operate within regulatory standards and are prepared for future requirements.

Our Differentiators:

• Infrastructure already aligned with banking regulatory standards.

• Strategic partnership with BTG Pactual, ensuring regular audits.

• Continuous monitoring to mitigate operational and regulatory risks.

• Full transparency in financial flows.

Stablecoin regulation is evolving, and the global trend is for requirements to become stricter and more detailed in the coming years. Lumx is fully committed to keeping up with and actively participating in these discussions, ensuring that its clients are properly guided and prepared for regulatory adjustments as they are implemented. Our goal is to serve as a trusted guide in this period of sector development and adaptation.

If your company seeks scalability and compliance in stablecoin payments, contact us to learn how we can help.

Note: This text is for informational purposes only and does not constitute legal advice. It is recommended to consult specialized professionals for specific guidance.