The Central Bank of Brazil has introduced new regulatory measures requiring financial institutions to report certain cryptocurrency transfers involving self-custody wallets, expanding oversight of digital asset activity under the country’s anti-money laundering framework.
The new requirements were introduced through Resolutions 588 and 589, which update existing rules for virtual asset service providers (VASPs), strengthen reporting obligations, and establish additional restrictions for unauthorized crypto service providers operating in Brazil.
Under Resolution 588, institutions authorized by the Central Bank of Brazil must report virtual asset transfers involving self-custody wallets when the transaction value reaches or exceeds the equivalent of $10,000. The requirement applies to transfers moving into or out of wallets directly controlled by users rather than managed by regulated custodial platforms.
The central bank said the measure is intended to improve monitoring and risk assessment capabilities. According to the institution, self-custody wallets can limit available information compared with assets held through authorized financial entities, making oversight and transaction analysis more challenging.
The reported information will be submitted to Brazil’s Council for Financial Activities Control (COAF), the country’s financial intelligence authority responsible for monitoring money laundering and terrorism financing risks. The collected data could allow authorities to organize information related to self-custody transactions and potentially develop broader visibility into wallet activity connected to users of authorized crypto exchanges.
Resolution 589 introduces additional compliance requirements by preventing regulated crypto businesses from interacting with virtual asset service providers that are not authorized to operate in Brazil. The measure is designed to create a more controlled environment for digital asset companies operating within the country.
The new rules will take effect on October 1, 2026, when the deadline for VASPs to obtain regulatory authorization expires. The increased compliance obligations and capital requirements have already affected the industry, with only five VASPs reportedly applying for licenses.
The regulatory changes represent a significant expansion of Brazil’s crypto oversight framework, moving beyond centralized exchanges and increasing attention on transactions involving user-controlled wallets.
Market participants may continue monitoring how crypto companies adapt to the new requirements, whether more service providers seek authorization, and how reporting obligations influence self-custody activity in Brazil’s digital asset market.
