Brazil's Central Bank Prohibits Stablecoin and Cryptocurrency Settlement for Cross-Border Transactions

The Central Bank of Brazil has imposed a ban on the use of stablecoins and cryptocurrencies for settling international transactions by electronic foreign exchange providers. The new regulation, outlined in BCB Resolution No. 561, published on April 30, updates the rules governing digital international payments, purchases, and transfers in Brazil. The new rules will come into effect on October 1, with a phased adaptation period extending into 2027. According to the new rules, payments between an electronic foreign exchange provider and its foreign counterpart must be made 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 company can no longer accept reais from a customer, convert the funds into a stablecoin or cryptocurrency, and then settle the payment abroad using a blockchain. However, the new regulation does not prohibit the trading of cryptocurrencies. Investors are still allowed to buy, sell, hold, and transfer cryptocurrency through authorized virtual asset service providers, as per Resolution BCB No. 521, which came into effect on February 2. The new rules specifically target the back-end payment infrastructure used by regulated electronic foreign exchange firms. The change is expected to impact companies such as Wise, Nomad, and Braza Bank, which had previously incorporated stablecoin settlement into their cross-border payment flows. For instance, Nomad uses 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 is substantial, with monthly transactions ranging from $6 billion to $8 billion, and stablecoins accounting for approximately 90% of the 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 hold or engage in cryptocurrency transactions. The new resolution also restricts electronic foreign exchange services to institutions authorized by the Central Bank of Brazil, including banks, Caixa Econômica Federal, securities and foreign exchange brokers, and payment institutions acting as e-money issuers or acquirers. Companies without authorization can continue to operate but must apply for authorization by May 31, 2027. They are also required to use segregated accounts for client funds and submit detailed monthly reports. On the other hand, Resolution 561 expands the scope of electronic foreign exchange services in one significant way. Providers are now allowed to handle transactions 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 is the second front in a broader effort to regulate the cryptocurrency market. In March, industry associations representing over 850 companies pushed back against the proposed extension of Brazil's IOF financial transaction tax to stablecoin operations. The 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.