Business

Brazil prepares new regulations for fast-growing fintechs - sources

The new regulations are likely to be announced as Nubank, Brazil's most prominent fintech, prepares for an IPO

Nubank buys Olivia
REUTERS/Paulo Whitaker
  • Brazilian authorities said they would try to continue encouraging startups because the fintechs were bringing innovation;
  • The consultations pointed to the need to increase capital requirements for the larger fintechs like Nubank, PagSeguro and Stone.

Brazil‘s government plans to publish new regulations for fintechs on Friday, following public consultations by the central bank, three sources told Reuters on Thursday.

READ ALSO: A new chapter in the battleground between incumbents and fintechs in Brazil: prepaid card interchange fees

They said the regulations for financial technology companies were discussed at an extraordinary meeting of the National Monetary Council, which oversees the Brazilian financial and monetary system. The meeting will continue on Friday.

READ ALSO: Brazil’s Nubank acquires Olivia, a financial assistant app

The public consultations were published a year ago, after complaints from established big banks that the fintechs were getting special treatment with lax regulations even when they had become very large.

Still, Brazilian authorities said they would try to continue encouraging startups because the fintechs were bringing innovation and increasing competition that was making the big banks improve their operations.

READ ALSO: Nubank files for double IPO: NYSE and B3

The consultations pointed to the need to increase capital requirements for the larger fintechs like Nubank, PagSeguro and Stone. The new regulations are likely to be announced as Nubank, Brazil‘s most prominent fintech, prepares for an initial public offering in New York that it hopes will value the company at about $50 billion. This figure would rank Nubank as the most valuable financial institution in Latin America, more than Brazil‘s largest bank Itaú Unibanco.

Get the best insights about Latin America market in your inbox