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

The Central Bank of Brazil has imposed a ban on the use of stablecoins and other cryptocurrencies for settling international remittances by electronic foreign exchange providers. This new rule, outlined in BCB Resolution No. 561 published on April 30, updates the regulations for Brazil's digital international payment system. The changes will come into effect on October 1, with a phased implementation schedule extending into 2027. As per the new rule, payments between an electronic foreign exchange provider and its foreign counterpart must be conducted through a foreign exchange transaction or a non-resident real-denominated account in Brazil, with cryptocurrencies no longer being a viable option. This means that a remittance firm can no longer accept reais from a customer, convert the funds into a stablecoin like USDT or USDC, or bitcoin, and then settle the payment abroad using a blockchain. However, the new regulation does not prohibit cryptocurrency trading. Investors are still allowed to buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers, as outlined in Resolution BCB No. 521, which came into effect on February 2. The latest resolution specifically targets the back-end payment infrastructure used by regulated electronic foreign exchange firms. Companies such as Wise, Nomad, and Braza Bank, which had integrated stablecoin settlement into their cross-border payment flows, will be affected by this change. For instance, Nomad utilizes Ripple's network to facilitate fund transfers 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 every 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 the previous year. Approximately 25 million Brazilians currently hold or engage in cryptocurrency transactions. The new resolution also imposes restrictions on electronic foreign exchange providers, limiting their operations to institutions authorized by the Central Bank of Brazil, including banks, securities and foreign exchange brokers, and payment institutions acting as e-money issuers or acquirers. Firms without authorization can continue to operate but must submit their applications by May 31, 2027. Additionally, they are required to maintain segregated accounts for client funds and submit detailed monthly reports. In a contrasting move, Resolution 561 expands the scope of electronic foreign exchange in one key area. Providers are now permitted to handle transfers related to financial and capital market investments in Brazil or abroad, with a transaction limit of $10,000. The same limit applies to digital payment solutions that are not integrated with e-commerce platforms. This regulatory move is the second front in a broader effort to oversee the cryptocurrency market. In March, industry associations representing over 850 companies pushed back against proposals to extend Brazil's IOF financial transaction tax to stablecoin operations. Brazil's regulator is effectively drawing a line for the coexistence of cryptocurrencies in the market, but not as a settlement infrastructure for electronic foreign exchange transactions.