Brazil’s Central Bank Toughens Capital Requirements for Fintech Firms

Brazil’s central bank is changing how capital requirements are calculated for financial institutions following a recent spate of probes into organized crime groups exploiting the services offered at Fintech firms, Bloomberg reported.

The new rules tie capital minimums to business activities rather than institutional types and will obligate companies using the word “bank” in their brands to retain additional capital starting from 2028, the news agency said. The regulations apply to both depository institutions and non-bank firms, including Fintech payment companies.

Prior to this week’s announcement, Brazil lowered the limits of wire transfers made via non-authorized Fintech firms and bumped up the deadline for such firms to get governmental authorization from December 2029 to May 2026, according to Bloomberg.

Attorney Bruno Balduccini of Pinheiro Neto said the higher thresholds could push weaker players to merge or close. “Some business models probably won’t work anymore,” he said, adding that while some firms may realize this by year-end, fuller consolidation will take longer, according to the report.