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

The Central Bank of Brazil has prohibited the use of stablecoins and cryptocurrencies for settling international transactions by electronic foreign exchange providers. The new regulation, BCB Resolution No. 561, published on April 30, updates the rules for Brazil's regulated digital international payment system, effective October 1, with adaptation deadlines extending to 2027. All payments between an eFX provider and its foreign counterpart must now 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 a remittance company can no longer accept reais from a customer, convert the funds into a stablecoin or bitcoin, and then settle the payment abroad using a blockchain. However, this new rule does not prohibit cryptocurrency trading. Investors are still allowed 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. Resolution 561 specifically targets the back-end payment infrastructure used by regulated eFX companies, affecting companies such as Wise, Nomad, and Braza Bank that had incorporated stablecoin settlement into their cross-border payment flows. 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 roughly 90% of this volume, according to data from Receita Federal. The country has seen significant growth in crypto adoption, ranking fifth globally in 2025, up from tenth the previous year, with approximately 25 million Brazilians holding or transacting in cryptocurrency. The new resolution also restricts eFX services to institutions authorized by the Central Bank of Brazil, including banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions acting as e-money issuers or acquirers. Companies without authorization can continue to operate but must apply for authorization by May 31, 2027, and must use segregated accounts for client funds and submit detailed monthly reports. On the other hand, Resolution 561 expands the scope of eFX in one area 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 not integrated with e-commerce platforms. This regulatory move is part of a broader push to clarify the role of cryptocurrencies in Brazil's financial system. In March, industry associations representing over 850 companies pushed back against proposals to extend Brazil's IOF financial transaction tax to stablecoin operations. The regulator is effectively drawing a line for how crypto can exist in the market, but not as a settlement infrastructure for eFX.