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

In a recent move, Brazil's central bank has forbidden the use of cryptocurrencies, including stablecoins and bitcoin, for settling international remittances by electronic foreign exchange providers. This change is outlined in BCB Resolution No. 561, which was published on April 30 and updates the rules governing Brazil's regulated digital international payments system. The new rules will come into effect on October 1, with a phased implementation schedule extending into 2027. Under the updated regulations, payments between an eFX provider and its foreign counterpart must be routed 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 bitcoin, and then settle the payment abroad using a blockchain. However, the new rules do 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 took effect on February 2. The latest resolution specifically targets the back-end payment infrastructure used by regulated eFX 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 utilizes Ripple's network to transfer funds between Brazil and the US, settling in stablecoins, while Braza Bank has issued a real-backed stablecoin on the XRP Ledger. Brazil's cryptocurrency market is substantial, with monthly transaction volumes ranging from $6 billion to $8 billion, and stablecoins accounting for approximately 90% of this 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 new 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. Firms 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 one key area. Providers are now permitted 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 effort to establish clearer guidelines for the cryptocurrency market. In March, industry associations representing over 850 companies pushed back against plans to extend Brazil's IOF financial transaction tax to stablecoin operations. By implementing these regulations, Brazil's regulator is seeking to establish a clear boundary for the coexistence of cryptocurrencies in the market, while preventing their use as infrastructure for eFX settlement.