Brazil's Central Bank Prohibits Stablecoin and Cryptocurrency Settlement for Cross-Border Payments

The Central Bank of Brazil has issued a ban on the use of stablecoins and cryptocurrencies for settling international remittances by electronic foreign exchange providers. The updated regulations, outlined in BCB Resolution No. 561, were published on April 30 and will come into effect on October 1, with a phased implementation period extending into 2027. According to the new rules, payments between an eFX provider and its foreign counterpart must be conducted through a foreign exchange transaction or a non-resident real-denominated account in Brazil, with cryptocurrencies no longer being a viable option. This means that remittance companies are no longer allowed to accept Brazilian reals from customers, convert them into cryptocurrencies such as USDT, USDC, or bitcoin, and then settle the payments abroad using blockchain technology. However, the new regulations do not prohibit cryptocurrency trading. Investors are still permitted to buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers, as outlined in Resolution BCB No. 521, which took effect on February 2. The updated rules specifically target companies such as Wise, Nomad, and Braza Bank, which had previously utilized stablecoin settlement for cross-border transactions. For instance, Nomad uses Ripple's network to transfer funds between Brazil and the US, settling the transactions in stablecoins, while Braza Bank has issued a real-backed stablecoin on the XRP Ledger. Brazil's cryptocurrency market currently processes between $6 billion and $8 billion in transactions per month, with stablecoins accounting for approximately 90% of the total volume, according to data from Receita Federal. The country has seen significant growth in crypto adoption, ranking fifth globally in 2025, up from tenth the previous year, with around 25 million Brazilians holding or transacting in cryptocurrencies. The resolution also imposes restrictions on eFX providers, limiting them to BCB-authorized institutions such as banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions acting as e-money issuers or acquirers. Companies without authorization can continue to operate but must apply for approval by May 31, 2027, and must use segregated accounts for client funds and submit detailed monthly reports. On the other hand, Resolution 561 expands the scope of eFX in certain areas. Providers are now allowed to handle transfers related to financial and capital market investments in Brazil or abroad, with a cap of $10,000 per transaction. The same limit applies to digital payment solutions that are not integrated with e-commerce platforms. This regulatory move is the second front in a broader effort to regulate the crypto market. In March, industry associations representing over 850 companies pushed back against proposals to extend Brazil's IOF financial transaction tax to stablecoin operations. The regulator's decision draws a clear line for the coexistence of cryptocurrencies in the market, but not as a settlement infrastructure for eFX.