Brazil's Central Bank Prohibits 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 other cryptocurrencies for settling international remittances by electronic foreign exchange providers. The updated regulations, outlined in BCB Resolution No. 561, published on April 30, will come into effect on October 1, with a phased implementation schedule extending into 2027. Under the new rules, payments between eFX 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. Remittance companies are no longer allowed to accept reais from customers, convert them into cryptocurrencies such as USDT, USDC, or bitcoin, and then settle the payments abroad using blockchain technology. However, the ban does not extend to 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 regulation effectively closes the payment rail used by regulated eFX firms for cross-border transactions. The change is expected to impact companies such as Wise, Nomad, and Braza Bank, which had previously integrated stablecoin settlement into their cross-border payment flows. For instance, Nomad utilizes Ripple's network to transfer funds between Brazil and the US, 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 monthly transactions, 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 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, including banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions acting as e-money issuers or acquirers. Companies without authorization can continue to operate 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. The same limit applies to digital payment solutions that are not integrated with e-commerce platforms. This regulatory move marks the second phase of a broader effort to establish a clear framework for the cryptocurrency market in Brazil. In March, industry associations representing over 850 companies pushed back against proposals to extend the country's IOF financial transaction tax to stablecoin operations. The regulator's goal is to establish a clear boundary for the coexistence of cryptocurrencies in the market, while preventing their use as a settlement infrastructure for eFX transactions.