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

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, updates the rules governing digital international payments, purchases, and transfers, effective October 1, with a phased implementation schedule extending into 2027. According to the new rule, payments between a 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 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 on a blockchain. However, the ban does not apply to crypto trading, and investors can continue to buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers. The new regulation primarily targets companies that had integrated stablecoin settlement into their cross-border payment flows, such as Wise, Nomad, and Braza Bank. Notably, Brazil's crypto market processes between $6 billion to $8 billion monthly, with stablecoins accounting for approximately 90% of the volume. The country has seen significant growth in crypto adoption, ranking fifth globally in 2025, with around 25 million Brazilians engaging in crypto transactions. Furthermore, the resolution restricts electronic foreign exchange services to institutions authorized by the Central Bank, including banks, securities brokers, and payment institutions. While the new rule imposes restrictions, it also expands the scope of electronic foreign exchange services to include transfers related to financial and capital market investments, albeit with a $10,000 per transaction limit. This development is part of a broader regulatory effort, following industry pushback against the proposed extension of the IOF financial transaction tax to stablecoin operations in March.