MICROCAPITAL BRIEF: Central Bank of Brazil to Apply Banking Regulations to Large Fintechs, Maintain Flexibility for New Entrants

During the course of 2023 and 2024, Banco Central Do Brasil (BACEN) will phase in tighter regulatory restrictions on large financial technology (fintech) firms in Brazil. Using the concept of proportionality, the central bank’s new rules will “preserve easier entry for new competitors” while boosting capital requirements on larger fintechs, which would cause greater disruption if they were to fail. These larger firms, such as Nubank, PagSeguro, PicPay and StoneCo, will be held to requirements similar to those with which banks now must comply.

Established in 1964, BACEN controls the country’s monetary policy with the aim of promoting the “efficiency of the national financial system,” including the stability of the Brazilian real. It does this by monitoring and seeking to influence macroeconomic indicators such as unemployment and inflation rates.

By Adhya Singh, Research Associate

Sources and Additional Resources

Cyprus Mail article
https://cyprus-mail.com/2022/03/13/brazil-central-bank-announces-tougher-rules-for-fintechs/

BACEN homepage
https://www.bcb.gov.br/

BACEN statistics
https://www.bcb.gov.br/en/statistics/monetarycreditstatistics

Brazilian government profile on BACEN
https://www.gov.br/pt-br/orgaos/banco-central-do-brasil

Nubank homepage
https://nubank.com.br/

PagSeguro homepage
https://investors.pagseguro.com/

PicPay homepage
https://www.picpay.com/

StoneCo homepage
https://www.stone.co/

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