Brazil election may change cryptocurrency regulatory rules after October 4

On the eve of Brazil's presidential election: Rama leads with a narrow lead, and regulation of the crypto industry becomes stricter

Brazil will hold the first round of voting in the presidential election on October 4. According to the latest poll released by Datafolha, incumbent President Luiz Inácio Lula da Silva received 45% of the valid votes, while Senator Flávio Bolsonaro received 42%. At the same time, Brazil's cryptocurrency industry is gradually adapting to new licensing, reporting and stablecoin-related regulations.

The race is tight: Polls show a close match, predicting divided market views

Datafolha's final pre-election survey released on October 3 covered 4,006 voters in 122 municipalities. The results show that the gap in support ratings between Lula and Bolsonaro overlaps within the statistical error range, and the competition is extremely fierce. The Brazilian High Electoral Court (TSE) is scheduled to hold the first round of voting from 8 a.m. to 5 p.m. local time on October 4. If no candidate obtains more than half of the valid votes, a second round of voting will be held on October 25. More than 158 million Brazilian citizens were eligible to vote in this election.

Several final polls showed Lula leading in the first round, but none of them reached the majority needed to avoid the second round. CNT/MDA polls showed that Lula won 47.8%, and Bolsonaro won 42.1%. Reuters reported that surveys by Datafolha, Queest, CNT/MDA and Atlas Intel all pointed to the possibility of runoff (second round of voting). In the latest Datafolha simulated second round of voting, Lula received 47% of the vote and Bossonaro received 46%, and the two were still in a statistical tie.

However, the forecast market's views are very different from opinion polls. According to reports, the Polymarket contract implies a probability of approximately 62% for Bolsonaro ultimately winning, while Lula has approximately 37%. Kalishi also shows a similar distribution. It should be noted that these numbers represent a price mechanism that predicts the market, rather than a direct survey of Brazilian voters.

Policy background: The crypto regulatory framework has been significantly tightened during Lula's term

Although cryptocurrency policy is not a core issue in this election, the new government will inherit a regulatory system that has changed significantly during Lula's current term. Currently, the Central Bank of Brazil has included virtual asset companies in its formal supervision. Resolution 520, which establishes operating requirements for virtual asset service providers, covers areas such as governance, customer protection, internal controls and anti-money laundering procedures, came into effect in February.

Companies that provide regulated encryption services must go through the central bank authorization process established by Resolution 519. In addition, a separate foreign exchange regulation incorporates multiple crypto activities, including international transfers using virtual assets and transactions involving legal tender reference assets, into Brazil's foreign exchange framework.

Regulators tightened the regulatory system again days before the election. Resolution 588 was issued on September 23 and came into effect on October 1. The resolution requires regulated financial institutions to make specific reports to the Financial Intelligence Center (Coaf) when virtual assets worth at least $10,000 are transferred into or out of self-managed wallets. The measure establishes reporting obligations, does not prohibit self-custody, and does not set a $10,000 trading cap. According to media reports, this requirement is within Brazil's existing anti-money laundering framework and is handled separately from tax issues.

Resolution 589 changed another deadline. Effective November 6, institutions regulated by the central bank will generally not be allowed to conduct market operations with virtual asset service providers that are not authorized to operate in Brazil, unless exceptions in the rules are met. Compliance burdens are changing the local industry landscape. According to reports, Lemon decided to withdraw from the Brazilian market because it believed license capital requirements were too expensive for its local operating costs, and plans to close the remaining Brazilian accounts on October 16.

Candidate Position: Bolsonaro lacks a clear crypto policy proposal

If Bolsonaro wins, uncertainty about the direction of crypto regulation may increase because his official presidential program does not stipulate a specific cryptocurrency policy. The TSE searchable version of Bolsonaro's government platform covers tax cuts, fiscal reform, privatization, banking, the digital economy and proposed regulatory deregulation, but there are no specific entries in the index on cryptocurrencies, stablecoins or virtual assets.

他的经济纲领呼吁在某些领域降低税率，并审查法规，包括所谓的“监管撤销”努力。将这些提议具体应用于中央银行的加密框架纯属推测，因为提交的纲领并未说明虚拟资产法规将被撤销或修改。这种缺乏特定加密提案的情况与卢拉的立场形成了不同的起点。如果卢拉胜选，将是引入现行规则的政府继续执政，但这并不能保证现有政策保持不变。博索纳罗未在其提交给TSE的纲领中公开承诺逆转、扩大或替换加密框架。

税务与稳定币：监管持续深化，全球采用率居首

税收政策是选举可能影响后续发展的领域之一。此前有报道称，财政部计划在大选前推迟关于加密货币税收的公众咨询，以避免在政治敏感时期提出困难的税收提案。该咨询预计将考虑加密资金流动的税收待遇，包括涉及稳定币的交易。由于推迟，该咨询产生的最终税收并未在延期前实施，其未来处理方式仍悬而未决。

Still, reporting requirements have continued independently of the tax debate. The Brazilian Federal Taxation Office has introduced the DeCripto system, and in accordance with Normative Directive 2,291, transactions conducted from July 2026 will be included in the new reporting system. The framework brings Brazil's disclosures into line with the Organization for Economic Cooperation and Development (OECD) Crypto Asset Reporting Framework. Stable coins account for the majority of reported activity. The Federal Revenue Service said in July this year that stablecoins accounted for approximately 80% of total declared crypto transactions, compared with only 3.5% in 2019.

The Central Bank of Brazil has also strengthened its supervision of transfers related to stablecoins and crypto activities linked to foreign exchange. Its rules require service providers to identify owners of self-custodial wallets covering foreign exchange transactions and maintain a process of checking the source and destination of virtual assets.

It is worth noting that Brazil currently ranks first in the global grassroots cryptocurrency adoption rate in Chainalysis's ranking. Chainalysis's 2026 Global Cryptocurrency Adoption Index ranks Brazil first overall, ahead of the United States, Nigeria and Japan. The analyst firm estimates Brazil's crypto economy at US$252.5 billion and ranks among the top four in all four categories: service traffic, point-to-point activity, cross-border flows and on-chain balances. Although Brazil does not rank first in a single category (second in cross-border flows, third in service flows, third in domestic point-to-point economies, and fourth in on-chain balances), its overall performance has enabled it to gain the overall ranking under the revised 2026 methodology. No. 1 position. These data are estimates based on online traffic data for information and services on the chain and should not be regarded as the government's official measurement of all cryptocurrency transactions in Brazil.

Post-election outlook: The regulatory calendar continues to advance

The first step is the election process. TSE will begin releasing the counting results after voting ends at 5 p.m. local time. If Lula, Bolsonaro or any other candidate fails to obtain more than 50% of the valid votes, the two candidates with the highest votes will compete for the presidency on October 25.

During the election process, existing cryptocurrency rules will remain in effect. A presidential change does not in itself eliminate central bank decisions, Federal Revenue Service reporting requirements, or rules that are already scheduled to take effect. Whether or not a second round of voting is held, the regulatory calendar will continue to move forward in the near future. Starting November 6, financial institutions supervised by the central bank will face restrictions on trading with virtual asset companies that lack operating authorization. Starting from January 1, 2027, other requirements from the central bank will expand the scope of supervision data to include customer balances, custody positions, certificates of reserves, and assets used for pledge. Another anti-fraud measure implemented on the same day requires providers to implement a 24-hour precautionary retention period when conducting additional risk checks for certain virtual asset transfers that exceed US$10,000 to overseas entities or self-managed wallets.