- Payment institutions will be able to carry out electronic exchange operations;
- Currently, only banks, brokers, and securities distributors are authorized to trade with foreign exchange.
Brazilian Central Bank will allow authorized payment institutions to carry out electronic exchange operations, according to a regulation proposal placed on public consultation on Thursday.
Currently, only banks, brokers, and securities distributors are authorized to trade with foreign exchange. Payment institutions’ operations will be limited to $100,000 and cannot be done in cash.
Additionally, Brazil’s Central Bank will also authorize payment institutions to offer remittance and transfer services. In the new model that is being proposed for these services, foreign exchange transactions may be closed in an aggregate model, as already happens with cross-border purchases made with credit cards.
According to the rules in force today, remittances and transfers are linked to individualized exchange operations, which have a higher cost, and generally require the contractor to go to an authorized institution.
“The cost is going to be diluted and there is also the gain of access because customers will be able to be accessed by a digital platform, the internet, by a mobile app,” said Lúcio Hellery, technician of the Brazilian Central Bank Prudential and Foreign Exchange Regulation Department.
The Central Bank also proposed to regulate the use of prepaid payment accounts by non-residents. By the authority’s proposal, these accounts should be maintained by institutions authorized to operate in the foreign exchange market, with limited transactions of BRL 10,000. These accounts are already regulated for Brazilian residents, but non-residents had only access to deposit accounts.
According to the Brazilian Central Bank, the proposal to improve exchange rate regulation takes into account technological innovations and new business models related to international payments and transfers and is in line with the exchange rate legislation in force.
Hellery said that, in the case of the approval of the bill that proposes a new legal framework for the foreign exchange market, sent to Congress in 2019, the Brazilian Central Bank may “go further” in its regulation proposal.
The proposal presented this Thursday will be in public consultation until January 29 and, according to Hellery, the idea is that they come into force after that.
(Translated by LABS)