Brazilian Banks Could Soon Cut Off Banking Support for Local Crypto Exxhanges

Two large commercial banks in Brazil, Itaú and Banco Bradesco, have started refusing to abide by an agreement preventing them from closing the accounts of local cryptocurrency exchanges.

According to Hispanic crypto news outlet Criptonotícias,  Banco Bradesco, one of Brazil’s largest commercial banks, was the first to refuse to abide by an agreement that prevented the financial institution from cutting off local cryptocurrency exchanges.

Brazil’s Administrative Council for Economic Defense (CADE) ruled, in December 2019, that banks were somewhat justified in shutting down the accounts of local cryptocurrency exchanges. The financial institutions argued there is no strict know-your-customer (KYC) compliance among exchanges, which means there are money laundering risks.

In its decision, CADE wrote:

There is rationality in banks' decisions to close or refuse to open accounts [for cryptocurrency exchanges], and this rationality is not conditioned on any motivation for such attitude.

As a result, CADE ruled banks could shut down the accounts of local cryptocurrency exchanges as there was no evidence pointing to the move being antitrust crimes. In response to the ruling, the Brazilian Association for Cryptocurrency and Blockchain (ABCB) filed an appeal with 14 arguments against the decision. Among these there were allegations of “obscurity,” “omissions,” and “contradictions.”

Banco Bradesco now reiterated that cryptocurrencies pose money laundering risks, and is as such choosing not to abide by any demands from the ABCB regarding cryptocurrency exchange accounts, and attacking the organization’s appeal. Banco Itaú, another major Brazilian bank, is also arguing against the appeal.

Cryptocurrency exchanges in Brazil have been fighting commercial banks for years now, with the battle seemingly having no end in sight. Despite the banks’ attitudes Brazilian people appear to be pro-crypto, as the city of Fortaleza, capital of the state of Ceará, has announced it’ll be selling transport tickets for BTC.

Last year, Brazil’s central bank adopted guidelines from the International Monetary Fund (IMF) and started officially recognizing cryptocurrencies like bitcoin as assets.

Featured image via Unsplash.