The Central Bank of Brazil unveiled stricter regulations for FinTech firms Friday (March 11), imposing regulations based on the size and complexity of these companies and creating tougher standards for required capital.
Reuters reports the new rules will begin taking effect in January 2023 and are due to be fully implemented by January 2025.
The rules will extend the requirements now used for conglomerates of financial institutions to encompass financial conglomerates run by payment institutions. The change is likely to impact companies like credit card issuer Nubank , payment firm PagSeguro and digital wallet PicPay.
The regulatory capital calculation will not take into account assets that have little or no value for payment institutions’ functioning, the bank said, thus ensuring companies have a greater capacity to absorb unexpected losses.
The bank adds the changes will make it easier for new competitors to enter the payments sector, “in order to increase competition in the system and financial inclusion.”
Reuters says that Brazil’s traditional banks had pleaded with…