BRAZIL: The Central Bank of Brazil publishes rules on the operation of the Regulatory Sandbox

December 2020 – Brazil – Rossetti Advogados

The Central Bank of Brazil and the National Monetary Council published, on October 26, 2020, Central Bank (BC) Resolution No. 29 and National Monetary Council (CMN) Resolution No. 4.865, to establish rules relating to the conduction of experiments in a Controlled Environment, named regulatory Sandbox, in which authorized companies may test, under certain conditions, projects that bring financial and payment innovations to their clients.

The purpose of this regulation is to eliminate regulatory barriers and to allow innovative business models, such as FinTechs, to reach a broad audience, generate productivity gains and strengthen competition in the Brazilian financial and payment systems.

According to the rules, the testing period in this Controlled Environment will occur in cycles, with a maximum duration of one (1) year, extendable a single time, at the discretion of the Central Bank, which will be responsible for selecting the participants. 

The Central Bank will closely monitor the development of projects, and it shall be granted access to the results obtained in order to evaluate the risks associated with the new products. If there is any problem, the innovation may be limited or even prohibited. On the other hand, if the experience is successful, large-scale sales may be permitted.

Another positive aspect is that the authorized companies may actually offer their products and services to the public, including upon the collection of tariffs. The participants, in turn, must comply with rules of conduct that encompass rules on the prevention of money-laundering and appropriate risk management of their activities.

The first cycle of the Regulatory Sandbox of the Central Bank of Brazil is scheduled to begin in the first half of 2021. The regulatory agency is soon expected to publish a notice containing the rules for selection, such as the number of participants and selection process schedules.

The Regulatory Sandbox represents a large and positive step in streamlining the financial system, facilitating the market’s access to new business models and promoting innovations and uses still unknown to the public.  

For more information on the above or in other matters, please contact Maristela SA Rossetti ( or Gilberto Rossetti (

This article is based on publicly available information and given for informational purposes only. It is not intended as legal advice or as a comprehensive analysis of the matters referred to herein.