Brazil's Central Bank Prohibits the Use of Stablecoins and Cryptocurrencies for Cross-Border Payment Settlements

The Central Bank of Brazil has announced 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 and will come into effect on October 1, with a phased implementation schedule extending into 2027. According to the new rule, all payments between an electronic foreign exchange provider and its foreign counterpart must be conducted through a traditional foreign exchange transaction or a non-resident real-denominated account in Brazil, with cryptocurrencies no longer being a viable option. This means that remittance firms can no longer accept local currency from customers, convert it into stablecoins such as USDT or USDC, or other cryptocurrencies like bitcoin, and then settle the payment abroad using blockchain technology. However, the new regulation does not prohibit cryptocurrency trading, and investors are still free to buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers, as per Resolution BCB No. 521, which took effect on February 2. The latest resolution primarily targets companies that had previously incorporated stablecoin settlement into their cross-border payment flows, such as Wise, Nomad, and Braza Bank. For instance, Nomad utilizes Ripple's network to transfer funds between Brazil and the U.S., settling the transactions 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 in transactions each month, with stablecoins accounting for approximately 90% of the total volume, according to data from the Receita Federal. The country has seen significant growth in crypto adoption, ranking fifth globally in 2025, up from tenth position in the previous year, with around 25 million Brazilians currently holding or transacting in cryptocurrencies. Furthermore, the resolution restricts electronic foreign exchange services to institutions authorized by the Central Bank of Brazil, including banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions that act as e-money issuers or acquirers. Companies without authorization can continue to operate but must submit their applications by May 31, 2027, and are required to use segregated accounts for client funds and submit detailed monthly reports. On the other hand, the resolution also expands the scope of electronic foreign exchange services to include transfers related to financial and capital market investments in Brazil or abroad, with a maximum limit of $10,000 per transaction. The same limit applies to digital payment solutions that are not integrated with e-commerce platforms. This regulatory move is part of a broader effort to establish clear guidelines for the cryptocurrency market in Brazil, with the regulator aiming to define the boundaries within which cryptocurrencies can operate, while preventing their use as a settlement infrastructure for electronic foreign exchange transactions.