Brazil's Central Bank Prohibits Use of Stablecoins and Cryptocurrencies for Cross-Border Payment Settlements

The Central Bank of Brazil has announced a ban on the use of stablecoins and other cryptocurrencies for settling international remittances by electronic foreign exchange providers. The new rules, outlined in BCB Resolution No. 561, which was published on April 30, update the regulations for Brazil's digital international payments system and will come into effect on October 1, with a phased implementation timeline extending into 2027. According to 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 a viable option. This means that remittance firms are no longer allowed to accept reais from customers, convert them into cryptocurrencies such as USDT, USDC, or bitcoin, and then settle the payment abroad using a blockchain. However, the new regulation does not prohibit cryptocurrency trading, and investors are still able to buy, sell, hold, and transfer digital assets through authorized virtual asset service providers, as per Resolution BCB No. 521, which came into effect on February 2. Instead, Resolution 561 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 example, Nomad uses 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 a monthly volume of $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 digital assets. The 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 to operate 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, allowing providers to handle transfers related to financial and capital market investments in Brazil or abroad, with a transaction limit of $10,000. 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 push to establish clear guidelines for the cryptocurrency market. In March, industry associations representing over 850 companies pushed back against proposals to extend Brazil's IOF financial transaction tax to stablecoin operations. By introducing these regulations, Brazil's regulator is drawing a clear line for the coexistence of cryptocurrencies in the market, while preventing their use as infrastructure for eFX settlements.