Brazil's Central Bank Prohibits Stablecoin and Crypto Use in Cross-Border Payment Settlements

The central bank of Brazil has prohibited providers of electronic foreign exchange services from utilizing stablecoins or other cryptocurrencies for settling international remittances. The updated regulations, outlined in BCB Resolution No. 561 and published on April 30, will take effect on October 1, with adaptation deadlines extending into 2027. According to the new rules, payments 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. Remittance companies are no longer allowed to accept reais from customers, convert the funds into cryptocurrencies such as USDT, USDC, or bitcoin, and then settle the payments abroad using blockchain technology. However, the new regulation does not prohibit cryptocurrency trading altogether. Investors are still allowed to buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers, as per Resolution BCB No. 521, which came into effect on February 2. Resolution 561 effectively closes the payment rail that regulated eFX companies had been using. This change is expected to impact companies such as Wise, Nomad, and Braza Bank, which had incorporated stablecoin settlement into their cross-border payment flows. Brazil's cryptocurrency market is substantial, 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 significant growth in crypto adoption, ranking fifth globally in 2025, up from tenth the previous year. Approximately 25 million Brazilians are involved in cryptocurrency transactions. The resolution also imposes restrictions on eFX providers, limiting them to BCB-authorized institutions such as banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions. Firms without authorization can continue to operate but must apply for authorization by May 31, 2027, and use segregated accounts for client funds while filing 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. This regulatory move is part of a broader push to establish clearer guidelines for the cryptocurrency market in Brazil. In March, industry associations representing over 850 companies pushed back against the proposed extension of Brazil's IOF financial transaction tax to stablecoin operations. The regulator is effectively drawing a line for cryptocurrency to coexist in the market, but not as a settlement infrastructure for eFX.