Crypto Actors See the Ban Proposal, Spearheaded by the Central Bank of Brazil, as Excessive and Explain That This Move

By Gabriel Rust

A proposal by the Central Bank of Brazil to ban the possibility of withdrawing stablecoins to self-custody wallets is being met with criticism from crypto exchanges, who view this measure as excessive and prefer an alternative proposal.

According to a report by BlockDeTijl, exchanges like Binance have been working with the central bank for months to propose alternatives that alleviate the government’s concerns.

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.

As highlighted by Binance’s regulatory legal head for Brazil and El Salvador, Thiago Sarandy, 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,” Sarandy stated.

Moreover, 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, adding that it could affect constitutional warranties.

“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,” he pointed out.

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,” Sacamone concluded.

The current president of the Central Bank of Brazil, Gabriel Galipolo, has linked crypto with illicit activity, stating that people use it to maintain “some kind of opaque vision for taxation or for money laundering.”