Since its introduction, the rule faced a lot of pushback from industry stakeholders and SEC commissioners. Meanwhile, Argentina finalized stricter regulations for crypto service providers, mandating audits, fund segregation, and compliance deadlines. In Brazil, lawmakers introduced a bill to legalize partial salary payments in cryptocurrencies like Bitcoin, to boost fintech innovation in the country. Crypto Custody Rule Faces Uncertainty The US Securities and Exchange Commission (SEC) is considering altering or withdrawing a proposed rule that would impose stricter custody standards for investment advisers handling crypto assets. The rule was originally introduced under the Biden administration in February of 2023 to ensure that investment advisers only custody client crypto with a qualified custodian. However, the proposal faced a lot of opposition from industry stakeholders and certain SEC commissioners. Mark Uyeda, the SEC’s acting chair, acknowledged the growing concerns about the rule’s broad scope during a speech at an investment conference in San Diego on March 17. He pointed out that the concerns raised may make it difficult for the SEC to move forward with the original proposal. Uyeda directed SEC staff to collaborate with the agency’s crypto task force to explore possible alternatives, including the withdrawal of the rule altogether. The proposal was introduced under the leadership of former SEC Chair Gary Gensler, and its aim was to expand custody requirements to cover all client assets, including cryptocurrencies. Gensler argued that crypto platforms could not be considered qualified custodians because of their operational structures. However, the proposal was met with resistance from Uyeda and Commissioner Hester Peirce, both of whom voiced their concerns about its implications for investment advisers and the broader crypto industry. Uyeda questioned whether advisers could even invest in crypto while complying with the proposed rule, despite ultimately supporting the measure with reservations. Peirce was the only commissioner to vote against it after warning that it will limit the availability of qualified crypto custodians. Uyeda’s latest statements were made just days after he revealed that he instructed SEC staff to examine options for dropping a separate proposal that would require some crypto firms to register as exchanges. This follows another policy shift from the SEC, which recently rescinded a rule, known as SAB 121, that required financial firms holding crypto assets to record them as liabilities on their balance sheets. In December, US President Donald Trump nominated ex-SEC Commissioner Paul Atkins to replace Uyeda as the agency’s chair. A Senate hearing on Atkins' nomination is reportedly scheduled for March 27. Argentina Finalizes Strict Crypto Rules Argentina’s securities regulator also recently finalized new rules for virtual asset service providers (VASPs), and established comprehensive requirements for crypto exchanges and platforms facilitating digital asset transactions. Published on March 13 under General Resolution No. 1058 by the National Securities Commission (CNV), the regulations introduce strict obligations covering registration, cybersecurity, asset custody, money laundering prevention, and risk disclosure. The measures are designed to boost transparency, stability, and user protection in the country’s crypto ecosystem. Under the new guidelines, VASPs must separate company and client funds, conduct annual audits, and submit monthly reports to the CNV. Since 2024, all VASPs operating in Argentina have been required to register with the registry of virtual asset service providers (PSAV), and the latest rules reinforce these requirements. Registrations can also now be revoked for noncompliance, and unregistered operators may face court-ordered bans. Those already registered with the PSAV must comply with the new regulations by July 1, while Argentine-incorporated companies have until Aug. 1, and foreign entities must conform by Sept. 1. CNV President Roberto E. Silva said that noncompliant entities will be banned from operating in the country. The regulatory overhaul was done after a broader shift in Argentina’s approach to crypto oversight, which intensified a year ago when the CNV mandated registration requirements and extended securities laws to crypto issuers. This shift came during a surge in cryptocurrency adoption, driven by the rapid depreciation of the Argentine peso. (Source: Chainalysis ) By mid-2024, more Argentines were turning to stablecoins like Tether’s USDT as a hedge against inflation. A Chainalysis report from October of 2024 found that Argentina surpassed Brazil in crypto inflows after recording approximately $91 billion between July 2023 and June 2024. Despite regulatory tightening, Argentina’s enthusiasm for digital assets is still strong, even in the wake of the LIBRA scandal involving President Javier Milei. Milei publicly endorsed the meme coin before its value suddenly collapsed, which quickly sparked allegations of a rug pull. However, the controversy has not really dampened crypto adoption, as Argentines continue to look for alternatives to traditional financial systems. Brazil Moves to Legalize Crypto Salary Payments Brazilian lawmakers, on the other hand, are considering new legislation that would officially allow employers to pay salaries in cryptocurrencies like Bitcoin (BTC). Federal Deputy Luiz Philippe de Orleans e Bragança introduced the bill on March 12, and proposed the regulation of crypto payments for wages, remunerations, and labor benefits. The bill is known as PL 957/2025 , and it legalizes voluntary and partial salary payments in cryptocurrencies while also requiring that a portion of wages still be paid in the national currency, the Brazilian real. Orleans-Bragança, a descendant of Brazil’s former royal family and a federal deputy for São Paulo, specified that Bitcoin payments cannot exceed 50% of an employee’s salary. The proposed law prohibits full salary payments in virtual assets, except in cases involving expatriates or foreign workers, in accordance with regulations that were set by the Central Bank of Brazil. Independent service providers, however, may receive full compensation in crypto, provided that contractual provisions allow it. Employers paying in crypto must follow exchange rates set by institutions authorized by the central bank. One of the main goals of the bill is to boost the financial technology sector in Brazil and attract crypto-related investments. Orleans-Bragança argues that the measure enhances economic flexibility by reinforcing the autonomy of workers and employers in shaping contractual agreements. The proposal takes inspiration from global precedents, like Switzerland , Japan , and Portugal as examples of jurisdictions where crypto salary payments have been successfully integrated. In Japan, regulations require individual agreements between employer and employee, while Portugal’s flexible approach contributed to the adoption of digital assets in the financial sector. Despite growing adoption in some countries, cryptocurrency payments are still restricted in others. Turkey and Russia have outright bans on crypto as a means of payment, while El Salvador, which made Bitcoin legal tender in 2021, has since stopped accepting tax and government fee payments in crypto due to conditions set by the International Monetary Fund (IMF). Brazil’s interest in cryptocurrency is not limited to salaries. The government recently pushed for broader crypto adoption within BRICS transactions , and is exploring blockchain technology to facilitate international trade.
