This week, a former Central Bank of Brazil official announced the launch of a stablecoin pegged to the Brazilian Real, India’s Financial Intelligence Unit tightened AML and KYC requirements for crypto exchanges, and Labor MPs in the UK urged the Prime Minister to ban crypto donations to political parties in the upcoming Election Bill.
To learn more, read on.
Former Brazil Central Bank official launches yield-sharing stablecoin
Tony Volpon, the former Deputy Governor for International Affairs at Brazil’s Central Bank from 2015 to 2016, announced the launch of the BRD stablecoin through his company, Inovação, on January 6, 2026, during the ‘Crypto na Real’ program. BRD is pegged to the Brazilian real, which shares interest earned from government bond reserves with token holders.
Inovação will issue BRD to target large financial institutions seeking access to Brazil’s high-yield government debt market through a digital token structure. BRD enters a competitive yet small market for Real-pegged stablecoins, with a combined on-chain circulation of approximately $20 million.
Crown’s BRLV already offers a similar yield-bearing model to institutional investors, having secured $67 million in commitments with $19 million in active circulation. Meanwhile, the Selic interest rate, currently at 15%, is at its highest level since July 2006.
The launch comes as Brazil prepares to implement new cryptocurrency regulations in February 2026, classifying stablecoin transactions as foreign-exchange operations subject to Central Bank oversight.
Why this matters: This development signals the emergence of sophisticated financial engineering in emerging market stablecoin products, creating new compliance considerations around yield-bearing tokens and reserve transparency. Regulators must understand how interest-sharing mechanisms could complicate transaction monitoring and whether these products create new avenues for capital flight or evasion of sanctions.
Read more on finance.yahoo.com.
India’s financial watchdog mandates stricter crypto AML/KYC requirements
India’s Financial Intelligence Unit (FIU) issued updated Anti-Money Laundering and Know Your Customer guidelines on January 8, 2026, requiring cryptocurrency exchanges to implement mandatory “liveliness” detection and geographical tracking during user onboarding. The new rules classify crypto exchanges as Virtual Digital Asset service providers subject to the Prevention of Money Laundering Act regulations.
The new enhanced regulations require users to provide a live selfie using software that verifies physical presence through eye blinking or head movement, thereby preventing the creation of deepfakes and static photos. Exchanges must record exact latitude and longitude coordinates, date, timestamp, and IP address during account creation. The “penny drop” method- a refundable one-rupee test transaction-is now mandatory to verify bank account ownership, while high-risk clients undergo KYC reviews every six months.
The FIU explicitly warned exchanges against supporting anonymity-enhancing coins, tumblers, and mixers, which it stated carry serious money laundering and terror financing risks. The guidelines discourage Initial Coin Offerings and Initial Token Offerings, as they “lack a justified economic rationale and present heightened and complex” financial crime risks. Additionally, all exchanges must maintain client records for a minimum of five years.
Why this matters: India’s technical controls around liveness detection and geo-tagging represent cutting-edge regulatory requirements that compliance professionals should monitorand assess for their effectiveness. These measures directly address identity fraud and jurisdictional evasion tactics, providing investigators with enhanced attribution data that could improve their ability to develop cases against suspected acts of financial crime.
Read more on CoinDesk.
UK Labor MPs push for a crypto asset political donation ban
Seven senior Labor MPs who chair parliamentary committees sent a letter on January 11, 2026, to Prime Minister Keir Starmer, urging the government to ban crypto donations to political parties in the forthcoming Elections Bill. The signatories cited concerns about transparency, foreign interference, and circumvention of disclosure thresholds.
Should the government ban political cryptocurrency donations, it could deal a significant blow to Nigel Farage’s Reform UK Party, which established its own crypto portal in May 2025 and has already received registrable cryptocurrency donations in 2026. The party says that these donations are subject to “enhanced checking”. Meanwhile, MPs have warned that cryptocurrency’s opacity enables donors to conceal identities and split donations into numerous small payments below legal disclosure limits.
Government sources acknowledged that crypto donations may undermine election integrity, but that implementing restrictions before the imminent publication of the new Elections Bill would be technically complex. Former civil servant Philip Rycroft is currently leading a review of foreign interference in political financing, which examines the role of cryptocurrency in this context. He is due to present his findings in March 2026.
Why this matters:
This move reflects emerging regulatory and political tensions around the global role of cryptocurrency in campaign finance transparency and anti-money laundering controls. Compliance professionals should anticipate increased scrutiny of politically exposed persons and donations from individuals with political connections.
Read more on The Guardian.
