“The closer cryptocurrencies are to the government, the easier it will be to regulate,” says the BC president

Roberto Campos Netopresident of the Central Bank of Brazil (BCB), argued that cryptocurrencies should not be banned, but they should be introduced into the financial market, which would help the government regulate the sector.

While participating in the event “Digitalization of the economy: innovation agenda of the Central Bank of Brazil”held last Wednesday (6) in Brasília and organized by Casa JotaCampos Neto emphasized the need to adapt to technological innovations.

According to him, bringing cryptocurrencies closer to the government brings cryptocurrencies would facilitate its regulation. Campos Neto also reinforced his view that trying to ban cryptocurrencies may not be a good idea.

“We understand that driving the world out cryptocurrencies in the financial world this may not be the best thing to do. I think it is better than a ban to try to understand it and bring it closer to the financial world.”. – Campos Neto said.

🚨 President of the Central Bank of Brazil on the ban #Bitcoin It is #cryptocurrencies:

“I think it is better to bring it closer to the financial world than to ban it” – Campos Neto.

“The closer cryptocurrencies are to the government, the easier it will be to regulate.” pic.twitter.com/vyv2zHTfeu

— Livecoins (@livecoinsBR) December 8, 2023

The closer to the government, the easier to regulate

Campos Neto defended the integration of cryptocurrencies into the traditional financial system as a more effective strategy than a ban and emphasized the importance of understanding and regulating cryptocurrencies, bringing them closer to the government.

He emphasized that the central bank’s initiative to develop a digital currency (CBDC) is a step in this direction, aiming to integrate technological innovation into the existing financial system.

According to Campos Neto, greater proximity to cryptocurrencies will enable more efficient regulation and deeper insight, reducing surprises and instability in the financial market.

“I think the closer [o governo] If you like cryptocurrencies, the better you can regulate it, the better you can understand it and the fewer surprises you will ultimately have.” – he said.

Campos Neto also warned of the risks of banning a relevant sector such as cryptocurrencies from the regulated financial system. According to him, problems in an unregulated sector can have significant consequences for the regulated system, as financial flows are interconnected.

Campos Neto’s opinion shows that he is aware of the topic, unlike other central banks around the world, who tried to ban cryptocurrencies and failed, such as China, which banned Bitcoin in 2021 and the volume years later saw it more than triple.

Regulating Bitcoin is irrelevant

In May 2021, Campos Neto had already spoken about the ban on cryptocurrencies in Brazil. According to him, it would be useless to regulate Bitcoin, because according to the BCB president, it would be more effective to regulate companies in the sector.

According to him, since cryptocurrencies are decentralized, it would be irrelevant to try to ban them as new digital assets with different technologies emerge every day.

Campos Neto then indicated that the market would be regulated, and that the Central Bank of Brazil is currently responsible for regulating the sector.

It is worth remembering that in November this year, the BCB unveiled guidelines for the future regulation of bitcoin and cryptocurrency brokers in Brazil. Among the regulatory strategies presented to guide institutions are two resolutions, one of which focuses on cryptocurrency companies.

The Central Bank held public consultations last month and is expected to issue three normative laws in early 2024.