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

The Central Bank of Brazil has announced a ban on the use of stablecoins and cryptocurrencies for settling international transactions by electronic foreign exchange providers. This update, outlined in BCB Resolution No. 561, published on April 30, revises the regulations governing Brazil's digital international payment system, affecting eFX providers. The new rule comes into effect on October 1, with a phased adaptation period extending into 2027. Under the new regulations, transactions 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 cryptocurrencies no longer being a viable option. A remittance company can no longer accept reais from a customer, convert them into a stablecoin like USDT or USDC, or bitcoin, and then settle the payment abroad using blockchain technology. However, this rule does not prohibit the trading of cryptocurrencies. Investors are still allowed to buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers, as per Resolution BCB No. 521, which became effective on February 2. Instead, Resolution 561 targets the back-end payment infrastructure used by regulated eFX firms for cross-border transactions. This change specifically impacts companies such as Wise, Nomad, and Braza Bank, which had incorporated stablecoin settlement into their cross-border payment flows. For instance, Nomad utilizes Ripple's network to transfer funds between Brazil and the U.S., settling 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 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 the previous year, with about 25 million Brazilians involved in crypto transactions. The resolution also imposes restrictions on eFX providers, limiting them to institutions authorized by the BCB, including banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions that issue or acquire e-money. Companies 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 in certain areas. Providers are now allowed 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 is part of a broader push to establish clearer guidelines for the cryptocurrency market. In March, industry associations representing over 850 companies expressed opposition to the extension of Brazil's IOF financial transaction tax to stablecoin operations. By implementing these regulations, Brazil's regulator is effectively drawing a line for how cryptocurrencies can exist and operate within the market, excluding their use as infrastructure for eFX settlement.