Brazil's Central Bank Prohibits Use of Stablecoins and Cryptocurrencies for Cross-Border Payment Settlement

The Central Bank of Brazil has implemented a ban on the use of stablecoins and cryptocurrencies for settling international remittances, effective October 1. This decision, outlined in BCB Resolution No. 561, updates the rules governing digital international payments, purchases, and transfers. The regulation stipulates that payments between providers and their foreign counterparts must be conducted through traditional foreign exchange transactions or non-resident real-denominated accounts in Brazil, with cryptocurrencies no longer being a viable option. Remittance firms are prohibited from converting customer funds into cryptocurrencies like USDT, USDC, or bitcoin for settlement abroad on a blockchain. However, this ban does not extend to crypto trading, and investors can continue to buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers. The new rule targets companies that had incorporated stablecoin settlement into their cross-border payment flows, such as Wise, Nomad, and Braza Bank. With Brazil's crypto market processing between $6 billion and $8 billion monthly, and stablecoins accounting for roughly 90% of this volume, the country has become a significant player in global crypto adoption, ranking fifth in 2025. Approximately 25 million Brazilians are involved in crypto transactions. The resolution also imposes restrictions on eFX providers, requiring them to be authorized by the BCB and to use segregated accounts for client funds, while also filing detailed monthly reports. Furthermore, it expands the scope of eFX to include transfers related to financial and capital market investments, with a transaction limit of $10,000. This regulatory move is part of a broader effort to define the role of cryptocurrencies in Brazil's market, distinguishing between their use as investment vehicles and their use as infrastructure for payment settlement.