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 remittances by electronic foreign exchange providers. A new resolution, BCB Resolution No. 561, published on April 30, updates the rules for the country's regulated digital international payment system, which includes purchases, withdrawals, and transfers. The new rule will come into effect on October 1, with adaptation deadlines extending into 2027. Transactions between an eFX provider and its foreign counterpart must now be conducted through a foreign exchange transaction or a non-resident real-denominated account in Brazil, with cryptocurrencies no longer being an option. Remittance firms are no longer allowed to take reais from customers, convert them into cryptocurrencies like USDT, USDC, or bitcoin, and then settle the payment abroad on a blockchain. However, the new rule does not prohibit the trading of cryptocurrencies. Investors can still 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 effectively closes the payment channel used by regulated eFX firms for cross-border transactions. The change primarily affects companies like Wise, Nomad, and Braza Bank, which had incorporated stablecoin settlement into their cross-border payment flows. For example, Nomad uses Ripple's network to transfer funds between Brazil and the US, settling in stablecoins, while Braza Bank has issued a real-backed stablecoin on the XRP Ledger. Brazil's cryptocurrency market processes 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 crypto adoption in 2025, up from tenth the previous year, with around 25 million Brazilians holding or transacting in cryptocurrencies. The resolution also restricts eFX 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. Firms without authorization can continue to operate but must apply for authorization by May 31, 2027. They are required to use segregated accounts for client funds and submit detailed monthly reports. Resolution 561 expands the scope of eFX in one area, 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 regulation is part of a broader push to establish clearer guidelines for the cryptocurrency market. 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 coexistence of cryptocurrencies in the market, while excluding them from being used as infrastructure for eFX settlement.