Source: Dall-E
By Felibertarian News
“O tempo passa e a gente aprende
Que nem tudo é pra sempre…”
— Jorge & Mateus
As Brazil finalizes the regulatory framework for crypto asset service providers, a key transitional mechanism is coming into focus: the grandfather period.
If you’re operating — or planning to operate — a crypto exchange in Brazil, understanding this concept is essential. It could determine whether you’re allowed to continue serving users in 2025 or forced to pause your operations until you’re licensed.
Here’s what you need to know.
🚦 The Legal Backdrop: Law 14.478/2022 and BCB Oversight
Brazil’s Crypto Asset Law (Lei nº 14.478/2022) came into force on June 20, 2023, establishing clear rules for the crypto market. The law created a new category of regulated financial service providers: virtual asset service providers (VASPs). It also made licensing by a federal regulator mandatory for all crypto exchanges operating in the country.
In June 2023, Decree 11.563/2023 officially designated the Central Bank of Brazil (BCB) as the national crypto regulator. From that point forward, BCB became responsible for licensing, regulating, and supervising crypto exchanges.
But here’s the catch: although the law became effective in mid-2023, the BCB’s specific licensing rules weren’t immediately available. That left existing platforms in a legal gray zone — allowed to continue operations temporarily until the BCB could roll out formal licensing procedures.
⏳ Enter the Grandfather Clause: Article 9 of the Crypto Law
To avoid disrupting the market while the BCB developed its regulations, Article 9 of the crypto law introduced a transitional regime.
It states that once the BCB publishes its final rules, existing service providers will have at least 6 months to become compliant. That means platforms already operating when the rules are issued won’t be forced to shut down immediately. Instead, they’ll get a grace period to submit their license applications and meet the new requirements.
This is Brazil’s “grandfather period” for crypto exchanges: a temporary legal shelter for incumbents.
🛠️ How It Will Work in Practice
BCB has indicated that this transitional period will unfold in two phases:
Phase 1: Proof of Operation
Exchanges that were already active before the BCB regulations take effect will need to prove they were operating legally in Brazil. This could involve:
Showing a registered legal entity (CNPJ)Demonstrating active trading volumeSubmitting prior compliance efforts (e.g., basic KYC, AML)
Phase 2: Full Authorization
Once their continued operation is validated, these exchanges must go through the full licensing process. This includes satisfying all of the BCB’s requirements, such as:
Minimum capital (e.g., R$ 3 million for a full-service exchange)Internal governance and risk management systemsLocal incorporation and physical presence in BrazilAML/CFT and customer due diligence programs
The grace period is not an exemption — it’s a runway to become fully compliant. If an exchange fails to meet the BCB’s licensing requirements within the deadline, it must cease operations in Brazil.
🚫 No Grandfathering for New Entrants
It’s important to emphasize: this grandfather clause applies only to exchanges that were operational before the BCB’s rules take effect.
If you’re launching a new crypto exchange in Brazil after mid-2025, you must obtain prior authorization from the Central Bank before offering services. There is no grace period for new players. Operating without a license once the framework is active could result in sanctions, fines, or forced shutdown.
📅 What Happens Next?
As of July 3, 2025, the BCB is finalizing its crypto licensing regulations, which are expected to be published in Q3 or Q4 2025. Once released, the clock starts ticking for existing exchanges to apply for authorization under the transitional regime.
Here’s a likely timeline:
Q3–Q4 2025: Final BCB regulations published (via Resolution)Immediately after: Licensing window opens+6–12 months: Grandfather period for incumbents to apply and complyBy mid-2026: Unlicensed exchanges must exit the market
✅ Key Takeaways
Existing crypto exchanges in Brazil will benefit from a grandfather period, allowing them to keep operating temporarily after the BCB rules are published.This grace period lasts at least 6 months, during which exchanges must apply for and obtain full BCB authorization.New exchanges will not be eligible for this transitional treatment — they must get licensed before launching.The BCB is expected to publish final licensing rules by late 2025. Exchanges should be preparing now.
Final Thoughts
Brazil is entering a new era of regulated, institutional-grade crypto services. The grandfather period is a pragmatic bridge — but it’s not a shortcut. If you’re running a crypto exchange in Brazil today, the message is clear: get your compliance house in order now.
Licensing, capital, AML programs, governance structures — these are no longer optional. The BCB’s upcoming rules will reshape the playing field, and only those who are prepared will stay in the game.
📌 Follow me on Medium for more insights into crypto regulation, fintech law, and digital finance in Latin America.
What the Grandfather Period Means for Crypto Exchanges in Brazil was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.