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

The Central Bank of Brazil has introduced a ban on 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 digital international payments system. The changes will come into effect on October 1, with a phased implementation schedule extending into 2027. Under 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. Remittance firms are no longer allowed to accept reais from customers, convert them into cryptocurrencies such as USDT, USDC, or bitcoin, and then settle the payments abroad using blockchain technology. It is essential to note that this regulation does not prohibit cryptocurrency trading. Investors are still able to buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers, as per Resolution BCB No. 521, which came into effect on February 2. The new resolution specifically targets the back-end payment infrastructure used by regulated eFX firms. Companies such as Wise, Nomad, and Braza Bank, which had integrated stablecoin settlement into their cross-border payment flows, are among those affected by the change. For instance, Nomad utilizes Ripple's network to facilitate fund transfers between Brazil and the U.S., settling transactions in stablecoins, while Braza Bank has issued a real-backed stablecoin on the XRP Ledger. According to data from Receita Federal, Brazil's cryptocurrency market processes between $6 billion and $8 billion in transactions per month, with 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. Approximately 25 million Brazilians currently hold or engage in cryptocurrency transactions. The resolution also imposes restrictions on eFX providers, limiting them to BCB-authorized institutions, including banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions acting as e-money issuers or acquirers. Firms without authorization can continue to operate but must submit their applications by May 31, 2027. Additionally, they are required to maintain segregated accounts for client funds and submit detailed monthly reports. In a separate development, Resolution 561 expands the scope of eFX to include transfers related to financial and capital market investments in Brazil or abroad, with a transaction limit of $10,000. The same limit applies to digital payment solutions that are not integrated with e-commerce platforms. This regulatory move marks the second front in a broader effort to oversee the cryptocurrency market. In March, industry associations representing over 850 companies pushed back against proposals to extend Brazil's IOF financial transaction tax to stablecoin operations. By introducing these regulations, Brazil's regulator is establishing clear boundaries for the coexistence of cryptocurrencies in the market, while preventing their use as infrastructure for eFX settlements.