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

In a recent move, Brazil's central bank has prohibited the use of stablecoins and other cryptocurrencies for settling international remittances by electronic foreign exchange providers. The new regulation, outlined in BCB Resolution No. 561, published on April 30, updates the rules governing Brazil's regulated system for digital international payments. The changes will take effect on October 1, with firms having until 2027 to adapt. Under the new rules, 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. This means that remittance firms can no longer take local currency from customers, convert it into cryptocurrencies such as USDT, USDC, or bitcoin, and then settle the payment abroad on a blockchain. However, the regulation does not prohibit the trading of cryptocurrencies, and investors can still buy, sell, hold, and transfer digital assets through authorized virtual asset service providers. The new rules primarily target companies that have built stablecoin settlement into their cross-border payment flows, such as Wise, Nomad, and Braza Bank. For instance, Nomad uses Ripple's network to move funds between Brazil and the U.S. and settle in stablecoins, while Braza Bank has issued a real-backed stablecoin on the XRP Ledger. Brazil's cryptocurrency market is substantial, with a monthly transaction volume of $6 billion to $8 billion, and stablecoins accounting for approximately 90% of this 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 cryptocurrencies. The resolution also imposes restrictions on eFX providers, limiting them to BCB-authorized institutions such as banks, securities and FX brokers, and payment institutions. Firms without authorization can continue to operate but must apply for permission by May 31, 2027, and must use segregated accounts for client funds and file detailed monthly reports. In a positive move, the resolution expands eFX to include transfers related to financial and capital market investments in Brazil or abroad, with a cap of $10,000 per transaction. This change is part of a broader regulatory push, with industry associations representing over 850 companies having pushed back against the extension of Brazil's IOF financial transaction tax to stablecoin operations in March. The regulator's move is seen as an attempt to draw a line for the coexistence of cryptocurrencies in the market, while preventing their use as settlement infrastructure for eFX.