Brazil central bank postpones higher capital requirements for fintechs to July 2023 By Reuters

BRASILIA (Reuters) – Brazil’s central bank on Friday announced the postponement of higher capital requirements for fintechs to July 2023, after establishing tougher rules for payment institutions based on their size and complexity that were due to start in January.

“The development and necessary adjustments in management systems and generation of prudential information by regulated institutions will require a longer period of adaptation than initially indicated by the regulator,” the central bank said in a statement.

The new framework will extend the proportionality of regulatory requirements currently used for conglomerates of financial institutions to include financial conglomerates led by payment institutions.

It is expected to affect companies such as credit card issuer Nubank, payment company PagSeguro, financial technology solutions firm StoneCo and digital wallet PicPay.

Companies will now have another six months before being subjected to the new calculation of regulatory capital, which will disregard assets that have little or no value for payment institutions’ functioning, ensuring that they build a greater capacity to absorb unexpected losses.