Brazil's Central Bank Prohibits Stablecoin and Crypto Transactions for Cross-Border Payments

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 new regulation, outlined in BCB Resolution No. 561, published on April 30, updates the rules governing digital international payments, purchases, and transfers in Brazil, with the changes set to take effect on October 1 and adaptation deadlines extending into 2027. Under the new rules, payments between an eFX 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 an option. Remittance companies are no longer allowed to convert customer funds into cryptocurrencies like USDT, USDC, or bitcoin to settle payments abroad on a blockchain. However, the regulation does not prohibit cryptocurrency trading, and investors can still buy, sell, hold, and transfer cryptocurrency through authorized virtual asset service providers. The new rule primarily affects companies that had incorporated stablecoin settlement into their cross-border payment flows, such as Wise, Nomad, and Braza Bank. Brazil's cryptocurrency market processes between $6 billion and $8 billion per month, with stablecoins accounting for around 90% of the volume. The resolution also imposes restrictions on eFX providers, limiting them to BCB-authorized institutions and requiring firms without authorization to apply by May 31, 2027. Additionally, the new regulation expands the scope of eFX to include transfers related to financial and capital market investments in Brazil or abroad, with a cap of $10,000 per transaction.