Brazil’s central bank increases operational costs for country’s leading fintechs

The Central Bank of Brazil (BCB) has bowed to pressure from the country’s leading banks and announced a more capital-intensive regulatory code for fintechs operating in the country.

On March 11, the BCB said it would phase in an increase in the capital requirements for companies operating in the payments category of financial institutions. Although the new regulation does not require material changes to fintechs’ operating models in the short term, in the longer term it will likely weigh on profitability by requiring these fintechs to hold higher capital against operational risks.