The Central Bank of Brazil has established new rules regarding the minimum capital required for financial institutions to operate in Brazil.
Starting from 2028, the minimum will rise to USD 1.68 billion from approximately USD 950 million, and this may affect around 500 firms, as the changes can potentially trigger market exits, mergers, or corporate restructuring. The minimum will be calculated based on firms’ activities, and not based on the type of institution.
Changing rules in Brazil
The new framework will base minimum capital and net worth requirements on the activities performed by institutions, rather than their classification. Institutions that have the word ‘bank’ in their name will have to hold some additional capital on top of the one they already have. The new rules will take effect immediately, and their implementation will be rolled out in phases through January 2028. The new regulation also addresses cybersecurity risks linked to technology service providers.
Accounts opened by financial technology firms at traditional banks with limited traceability of the actual fund holder must be closed if they are used for unauthorised financial services or to conceal third-party obligations, according to the bank.
The initiative aims to close loopholes that make final beneficiaries unknown, following police investigations under Operation Hidden Carbon, which found fintechs were used for fraud and criminal activity. Brazil carried out raids across the country targeting multibillion-dollar money laundering and fraud schemes linked to organised crime in the fuel sector, according to authorities. According to Reuters, approximately USD 8.56 billion in financial transactions were linked to the schemes and moved through fintech companies from 2020 to 2024.
In another mission to improve security, the bank also launched new features within Pix, allowing users to dispute transactions suspected of involving fraud. The new capability enables account holders to initiate the process directly within their financial institution’s app without the need for separate communication channels. the function sends a notification to the institution that received the funds. That institution is then required to freeze the available balance connected to the disputed transaction.
