Brazilian Fintechs Face New Regulatory Scrutiny

Brazilian Finance Minister Fernando Haddad revealed a significant regulatory shift on Thursday, announcing that local fintech firms will now be recognized as financial institutions. They will be required to report to the federal revenue service, mirroring the protocols followed by major banks.

This decision will enforce fintechs to disclose detailed explanations about financial transactions, especially those deemed unusual, as underscored by Haddad while addressing reporters in Brasilia.

The announcement comes in the wake of recent raids by Brazilian authorities, aimed at dismantling multibillion-dollar money laundering and fraud operations within the fuel sector, operations that reportedly included funds funneled through fintech companies.

(With inputs from agencies.)