Brazil Central Bank Puts Brakes on Tougher Rules for Fintechs

Brazil's central bank has put the brakes on tougher regulations for the burgeoning fintech industry, withdrawing a draft proposal that had been set to be voted on last month by the government's top financial policy-making body, four sources familiar with the matter told Reuters. On Nov. 18, the central bank proposed that the regulations be discussed at an extraordinary meeting of the National Monetary Council (CMN) but the new rules - which look to level the playing field between fintechs and traditional banks - were never voted on, the sources say. It is unclear why the central bank chose to delay the passing of the regulatory changes but it has left a multi-billion-dollar sector on tenterhooks. The proposed changes would raise the minimum capital requirements for payment institutions according to their size, transaction volume and risk-weighted assets. They have been expected by the sector in some form since a public consultation was opened on the subject in late 2020. Read more.