Central Bank of Brazil toughens rules for fintechs

Tuesday 15 March 2022 13:02 CET | News

Brazil's central bank has toughened the rules for fintechs, saying that payment institutions will be subject to regulations based on their size and complexity and raising standards for required capital.

The new framework, which will start taking effect in January 2023 with full implementation by January 2025, will extend the proportionality of regulatory requirements currently used for conglomerates of financial institutions to include financial conglomerates led by payment institutions.

The calculation of regulatory capital will disregard assets that have little or no value for payment institutions' functioning, said the central bank, noting that this will ensure companies have a greater capacity to absorb unexpected losses.

The changes aim to preserve easier entry for new competitors in the payments sector, ‘to increase competition in the system and financial inclusion,’. 

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Keywords: central bank, banks, regulation, fintech, payment institution
Categories: Banking & Fintech
Countries: Brazil
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Banking & Fintech

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