@R0crypton 3 January 2025 edited more from that month

Brazil’s central bank wants to ban self-custody of stablecoins

First it was in Europe, now Brazil has opened a public consultation on the subject of "prohibiting self-custody of stablecoins". I'll get straight to the point! This is due to the fear of the devaluation of the Real, which is the Brazilian currency, and at this very moment I need 6.20 reais to buy 1 dollar. Imagine what goes through the minds of the rulers who inflate the currency of their emerging country with their fiscal mismanagement, when they think about the possibility of a dollar-backed stablecoin like USDT becoming a legal tender within the country due to a lack of "regulation". By nature, it would compete with the local currency, and even the reserves would be in stablecoins and the government would end up losing "control" over the compulsory use of the local currency (imagine how interesting it would be if I could buy my bread for breakfast with my Phantom wallet and the bakery owner accepted it and used it to pay the employees... And so on... It would be the end of the local currency of an emerging country). However, we know that this is not how it works with cryptocurrencies. News like this only increases decentralization and the creation of increasingly liberating tools from the clutches of these vultures. I would like to comment on the news I read on the subject, I will leave the source at the end. The Central Bank of Brazil recently launched a public consultation that is causing a stir, especially among us cryptocurrency users. The proposal under discussion involves the regulation of virtual asset service providers (VAPs) and raises an issue that concerns many people: the possible prohibition of transfers of stablecoins, such as USDT, to self-custody wallets, such as Metamask or Trezor.    According to the central bank, the idea behind this is to try to keep these transactions within regulated exchange platforms, where there is already greater control through KYC (Know Your Customer). In other words, the goal is to prevent money from circulating under the radar. But for those who use their own wallets, this proposal brings a great loss of opportunities (friends, you know the truth, they don't want you, like me, to have USDT staked at 10% per year earning a return on an altcoin, in my case $NEAR, or so many other income applications that we have access to in the decentralized universe using stablecoins).    Many people see stablecoins as a safe way to protect their money against the devaluation of the real, especially with the constant fluctuations in the Brazilian economy. USDT, for example, is pegged to the dollar, which guarantees a certain stability. Preventing stablecoins from being withdrawn to personal wallets could end up encouraging the use of more decentralized solutions that are less controlled by the government. The point is that, if this proposal is approved, the transfer of stablecoins would be restricted to local exchanges. This means that the money would remain there, without the possibility of the user having full control over it. This raises an important question: is this the best way to deal with the growth of cryptocurrencies in Brazil? We know that it is not. Instead of the government stopping the issuance of currency and tightening the budget or studying a way to make the local currency in case the Brazilian real gains value against other currencies, they want to prohibit it, take away our freedom of choice, they want to literally put their hands in our wallets. The central bank is trying to prevent the Real from losing strength against cryptocurrencies, especially stablecoins, which over time could end up becoming a kind of parallel currency in everyday life. There is a fear that this measure will limit users' freedom, going against the essence of cryptocurrencies, which is precisely decentralization and self-control over our assets. The cryptocurrency market is growing rapidly in Brazil, and the central bank wants to keep up with this movement. The question is how to do this without discouraging the use of cryptocurrencies with so many arbitrary regulations.