Brazil’s central bank governor Roberto Campos Neto on Wednesday said policymakers are aiming to tighten cryptocurrency regulation and subject brokerages to their supervision.

Speaking during a hearing in Congress, Campos Neto emphasized regulators will scrutinize the backing of cryptocurrencies and associated activities, given the significant surge in cryptocurrency imports by Brazilians.

Data released by the central bank this week revealed cryptocurrency imports jumped by 44.2 per cent from January to August compared to the same period last year, totalling $7.4 billion.

There is a perception that local demand has shifted toward stablecoins, which are cryptocurrencies typically linked to real-world assets like the US dollar, with people using cryptocurrencies more as a means of payment rather than just for investment, said Campos Neto.

“We understand that a lot is connected to tax evasion or linked to illicit activities,” he added.

Campos Neto also mentioned the Brazilian central bank’s digital currency DREX, initially slated for launch by the end of next year, is expected to play a role in the world of crypto assets in Brazil.