Coinbase opposes a proposal to break the market in Brazil

Coinbase VP Tom Duff Gordon said concerns about stable use for illegal purposes in Brazil can be handled differently without prejudging adoption and without affecting users who use these assets for their operations.

Coinbase criticizes Brazil’s Stablecoin Regulation and offers alternatives

Coinbase, one of the cryptocurrency giants, criticized future regulations that would hinder the use of Stablecoins in Brazil. Coinbase VP Tom Duff Gordon praised the central bank’s openness in calling for consultation before enforcing such measures, but criticised the scope of such proposals that affect its ability to deal with stablecoins in the country.

Specifically, central banks prohibit the withdrawal of stables to their own host wallets, led by concerns about possible use for money laundering and tax evasion purposes.

Speaking about the effects of the proposed measures on the market, Gordon said:

I think central banks can rethink this issue. Stablecoins are fundamental to future development of the Internet and decentralized finance, and independent wallets play a key role in this ecosystem.

Additionally, executives said they proposed an alternative to the ban that addresses bank concerns as part of public consultations prior to future adoption of these measures. “In response to BC’s public consultations, we presented discussions on how to safely implement this model and addressed legitimate concerns about AML (money laundering anti-money laundering) and KYC (knowing customers) practices,” he emphasized.

Brazilian authorities have highlighted the rise of the Stablecoins market and their vision by floating an increase in remittance use last year and suggestions to tax these activities.

This led to a proposal to ban withdrawal to independent wallets to better explain possible leaks, as it is infeasible to track the movement of these wallets.

This could potentially criminalize potentially decentralized financial applications. Given that most of them rely on Stablecoins as part of their yield proposals, preventing the legal use of these tools for Brazilians.