[DigitalToday reporter Jinju Hong (홍진주)] More than 90 percent of Brazil's crypto businesses may withdraw from the market due to the central bank's new capital rules, according to an assessment.

CoinPost, a blockchain outlet, reported on Sunday local time that of 200 to 300 crypto-related firms operating in Brazil, only 20 to 25 are expected to meet regulatory requirements to apply for a licence.

Some in the market also expect the number of operators that actually obtain licences to remain at around 10. In that case, about 290 out of as many as 300 operators could close their businesses or begin wind-down procedures. That would mean the new rules could become a standard determining whether a business can continue, beyond a simple reporting obligation.

The key is the prudential capital rules being introduced by the Central Bank of Brazil. Depending on the type of operator, firms are required to hold capital of up to 37.2 million reais. The outlet put that at about $7.2 million. For smaller operators, the threshold itself is acting as a major barrier.

The cost burden does not stop at capital. Operators must also build audit systems, implement anti-money laundering and counter-terrorist financing frameworks, and meet ongoing reporting obligations to the central bank. As overall costs of responding to regulation rise, critics say the number of operators that struggle to keep operating could increase.

Some local firms have already begun scaling back or restructuring. Bitnuvem, NovaDAX, Digitra and Coinext announced the end of retail operations or restructuring. They did not say those decisions were directly linked to the new rules.

A timetable has also been set. The actual scale of the restructuring is expected to become clear after Oct. 30. From that day, operators enter the licence application process, and those that do not apply are given a 30-day grace period to liquidate the business and notify customers. The expectation that only 20 to 25 companies can apply and that actual approvals could be around 10 shows that barriers to entry in Brazil's crypto market have risen sharply.

Brazil has recently expanded the scope of crypto-related regulation. The Central Bank of Brazil previously said it would ban the use of cryptocurrencies for cross-border remittances and payments subject to regulation. It did not block crypto transfers themselves. With the addition of these capital rules, the Brazilian market is more likely to be reorganised around a small number of operators that can obtain licences. Key points to watch are the number of companies that apply, the number that pass, and how customer asset settlement and business closures proceed during the grace period.