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

The Central Bank of Brazil has introduced a ban on the use of stablecoins and cryptocurrencies for settling international remittances by electronic foreign exchange providers. The new regulation, outlined in BCB Resolution No. 561, was published on April 30 and will come into effect on October 1, with a phased implementation schedule extending into 2027. According to 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 companies can no longer accept reais from customers, convert them into cryptocurrencies like USDT, USDC, or bitcoin, and then settle the payments abroad using blockchain technology. However, the ban does not apply to cryptocurrency trading, and investors are still allowed to buy, sell, hold, and transfer digital assets through authorized virtual asset service providers. The new regulation targets companies that have integrated stablecoin settlements into their cross-border payment flows, such as Wise, Nomad, and Braza Bank. Brazil's cryptocurrency market processes between $6 billion and $8 billion 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 in 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, and introduces new requirements for firms without authorization. Additionally, the regulation 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. This move is part of a broader regulatory effort, following industry pushback against the extension of Brazil's IOF financial transaction tax to stablecoin operations in March. The regulator is establishing clear boundaries for the use of cryptocurrencies in the market, while allowing them to coexist with traditional financial systems.