Brazil central bank aims to simplify portfolio investment process for non-residents in 2024


Adds details from news conference in paragraphs 3-9

BRASILIA, March 4 (Reuters) - Brazil's central bank unveiled on Monday its plans to conduct a public consultation and issue regulations regarding the simplification of the process for non-residents' investment in portfolios.

This initiative aligns with the central bank's priorities for this year, as outlined in a press release, where it also emphasized its intention to regulate and enhance the efficiency of interbank operations in the foreign exchange market.

According to Ricardo Moura, the head of the central bank's prudential and foreign exchange regulation department, the aim is to streamline records regarding the portfolio investment process, which is considered outdated and inherited from a time when "the balance of payments was poor."

"It is to facilitate the day-to-day situation for individuals, companies investing in Brazil, Brazilians investing abroad, and also for people entering and leaving the country," he said at a news conference.

Moura mentioned that the regulation for interbank operations would follow the same simplification approach but would consist of a more technical adjustment less visible to the citizens.

These two initiatives continue the modernization efforts of the foreign exchange framework after Brazil approved a 2021 bill in this regard.

In the regulatory priorities for this year, the central bank also included regulating the use of virtual assets in the foreign exchange and capital markets, a topic that had already been the subject of a public consultation at the end of last year.

Moura said that the central bank aims to regulate how these virtual assets can be used for cross-border transfers.

When asked if this would affect the stablecoin market, which has surged in Brazil, Renato Uema, head of the financial system regulation department, said that the central bank would specifically address the issue at a later stage, given its complexity.

Stablecoins are pegged to real-world assets, such as the U.S. dollar, and therefore fluctuate much less than other crypto assets like bitcoins.

Last year, central bank governor Roberto Campos Neto mentioned that the increased demand for stablecoins in Brazil was largely associated with tax evasion or linked to illicit activities.

(Reporting by Marcela Ayres; Editing by Steven Grattan)

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