Brazil's Central Bank Prohibits Stablecoin and Crypto Use in 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 updated rules, outlined in BCB Resolution No. 561, published on April 30, will take effect on October 1, with a phased implementation schedule extending into 2027. According to the new regulations, payments between an eFX provider and its foreign counterpart must be conducted through a foreign exchange transaction or a non-resident real-denominated account in Brazil, with the use of cryptocurrencies prohibited. This means that remittance companies can no longer accept reais from customers, convert them into stablecoins like USDT or USDC, or bitcoin, and then settle the payment abroad using a blockchain. However, the regulation does not prohibit cryptocurrency trading, and investors can still buy, sell, hold, and transfer digital assets through authorized virtual asset service providers, as per Resolution BCB No. 521, which came into effect on February 2. The new rule specifically targets companies that have integrated stablecoin settlement into their cross-border payment flows, such as Wise, Nomad, and Braza Bank. Brazil's cryptocurrency market processes between $6 billion and $8 billion monthly, with stablecoins accounting for approximately 90% of the volume, according to data from Receita Federal. 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 digital assets. The resolution also imposes restrictions on eFX providers, limiting them to BCB-authorized institutions, including banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions acting as e-money issuers or acquirers. Firms without authorization can continue operating but must apply for approval by May 31, 2027, and are required to use segregated accounts for client funds and submit detailed monthly reports. On the other hand, Resolution 561 expands the scope of eFX 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. This regulatory move is part of a broader effort to establish clear guidelines for the use of cryptocurrencies in Brazil, with the regulator seeking to define the role of crypto in the market while ensuring it does not serve as a settlement infrastructure for eFX.