Brazil's Central Bank Prohibits Stablecoin and Cryptocurrency Settlement 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. The changes will come into effect on October 1, with a phased implementation schedule extending into 2027. Under the new rules, payments between an electronic foreign exchange 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 local currency from customers, convert it into cryptocurrencies like USDT, USDC, or bitcoin, and then settle the payment abroad using blockchain technology. However, the regulation does not prohibit cryptocurrency trading, and investors are still allowed to buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers, as per Resolution BCB No. 521, which took effect on February 2. The latest resolution primarily targets 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 incorporated 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 is significant, with monthly transactions ranging from $6 billion to $8 billion, and stablecoins accounting for approximately 90% of the volume, according to data from Receita Federal. The country has seen substantial growth in crypto adoption, ranking fifth globally in 2025, up from tenth in the previous year, with around 25 million Brazilians holding or transacting in cryptocurrencies. The resolution also imposes restrictions on electronic foreign exchange providers, limiting their operations to institutions authorized by the Central Bank of Brazil, including banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions acting as e-money issuers or acquirers. 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 electronic foreign exchange in one area, 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 regulation is part of a broader effort to establish a regulatory 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 move is seen as an attempt to define the role of cryptocurrencies in the market, allowing them to coexist while limiting their use as infrastructure for electronic foreign exchange settlements.