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

The Central Bank of Brazil has prohibited digital foreign exchange providers from utilizing stablecoins, bitcoin, or other cryptocurrencies for settling international remittances. The updated rules, outlined in BCB Resolution No. 561, were published on April 30 and will come into effect on October 1, with adaptation deadlines extending into 2027. According to the new regulations, payments between a digital foreign exchange 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 an option. This means that remittance companies can no longer accept reais from customers, convert the funds into USDT, USDC, or bitcoin, and settle the payment abroad on a blockchain. However, the rule does not prohibit cryptocurrency trading, and investors can still buy, sell, hold, and transfer cryptocurrency through authorized virtual asset service providers. The new regulations target companies such as Wise, Nomad, and Braza Bank, which had incorporated stablecoin settlement into their cross-border payment flows. Brazil's cryptocurrency market is substantial, with monthly transactions ranging from $6 billion to $8 billion, and stablecoins accounting for approximately 90% of the volume. 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 crypto. The resolution also restricts digital foreign exchange services to institutions authorized by the Central Bank of Brazil, including banks, securities and FX brokers, and payment institutions. While the new regulations impose restrictions on the use of cryptocurrencies for settlement, they also expand the scope of digital foreign exchange services to include transfers related to financial and capital market investments, with a transaction limit of $10,000.