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

In a move to regulate digital international payments, Brazil's central bank has prohibited the use of stablecoins and other cryptocurrencies for settling overseas remittances by electronic foreign exchange providers. The updated rules, outlined in BCB Resolution No. 561, will come into effect on October 1, with a phased adaptation period extending into 2027. According to the new regulation, payments between providers and their foreign counterparts must be conducted through traditional foreign exchange transactions or non-resident real-denominated accounts in Brazil, with cryptocurrencies no longer being a viable option. This means that remittance firms can no longer convert customer funds into cryptocurrencies like USDT, USDC, or Bitcoin to settle payments abroad using blockchain technology. However, the new rule does not impact crypto trading, and investors can still buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers. The change primarily affects companies that had incorporated stablecoin settlement into their cross-border payment flows, such as Wise, Nomad, and Braza Bank. Brazil's crypto market, which processes between $6 billion and $8 billion monthly, will need to adapt to these new regulations. The country has seen significant growth in crypto adoption, ranking fifth globally in 2025, with approximately 25 million Brazilians engaging with digital assets. The resolution also imposes restrictions on eFX providers, limiting them to BCB-authorized institutions, and introduces new requirements for client fund segregation and monthly reporting. Additionally, the updated rules expand the scope of eFX to include transfers related to financial and capital market investments, with a transaction limit of $10,000. This regulatory development is part of a broader effort to establish clear guidelines for the use of cryptocurrencies in Brazil's market.