Brazil Considers Reviving Fintech Transaction Reporting Regulations

Brazil’s tax service is reconsidering transaction reporting rules for fintechs due to money laundering concerns. Proposed regulations faced public opposition, resulting in delays. The agency acknowledges challenges with monitoring fintech activities.

Brazil’s tax revenue service is contemplating the reinstatement of transaction reporting rules for fintech companies, citing heightened concerns regarding potential money laundering. Robinson Barreirinhas, the agency’s head, noted that while they possess existing tools to monitor financial activities, these are not currently utilized for fintech operations.

Last year, proposed regulations for fintechs were put on hold following public dissent. A new regulation introduced in September 2023 sought to standardize reporting requirements for fintechs in line with banks. However, due to backlash, its implementation was postponed until January 2024.

Furthermore, Barreirinhas expressed that the rise of organized crime in Brazil is intertwined with issues such as smuggling, the cryptocurrency market, and online betting activities.

In summary, Brazil’s intention to revive transaction reporting requirements for fintech companies stems from concerns over money laundering and organized crime. Previous regulatory attempts have faced public pushback, resulting in delays. The focus remains on ensuring fintechs are subject to the same scrutiny as traditional financial institutions to mitigate potential risks.

Original Source: www.techinasia.com