Brazil's Central Bank Prohibits Stablecoin and Crypto Use in Cross-Border Payment Settlements

The Central Bank of Brazil has prohibited the use of stablecoins and cryptocurrencies for settling international remittances by electronic foreign exchange providers. Published on April 30, BCB Resolution No. 561 updates the rules governing eFX, Brazil's regulated system for digital international transactions, which will come into effect on October 1, with adaptation deadlines extending to 2027. All payments between an eFX provider and its foreign counterpart must be made through a foreign exchange transaction or a non-resident real-denominated account in Brazil, with cryptocurrencies no longer being an option. Remittance companies are no longer allowed to accept reais from customers, convert them into cryptocurrencies like USDT, USDC, or bitcoin, and then settle the payment abroad using blockchain technology. However, this new rule does not prohibit cryptocurrency trading. Investors are still permitted to buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers, as per Resolution BCB No. 521, which became effective on February 2. Resolution 561 effectively closes the back-end payment rail that was being utilized by regulated eFX firms. This change specifically targets companies such as Wise, Nomad, and Braza Bank, which had incorporated stablecoin settlement into their cross-border payment flows. 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 is currently processing between $6 billion and $8 billion per month, with stablecoins accounting for approximately 90% of the volume, according to data from Receita Federal. The country ranked fifth in global cryptocurrency adoption in 2025, up from tenth place the previous year, with around 25 million Brazilians holding or transacting in cryptocurrencies. The resolution also restricts eFX to institutions authorized by the BCB, including banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions acting as e-money issuers or acquirers. Firms without authorization can continue operating but must apply by May 31, 2027, and use segregated accounts for client funds, while also filing detailed monthly reports. Resolution 561 expands the scope of eFX in one direction by allowing providers 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 new rule represents the second front in a broader regulatory push. In March, industry associations representing over 850 companies pushed back against the proposal to extend Brazil's IOF financial transaction tax to stablecoin operations. Brazil's regulator is establishing boundaries for the existence of cryptocurrency in the market, but not as a settlement infrastructure for eFX.