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

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 newly introduced BCB Resolution No. 561, published on April 30, updates the regulatory framework for digital international payments, purchases, and transfers in Brazil. The updated rules will come into effect on October 1, with a phased adaptation period extending into 2027. According to the new regulations, 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 firms are no longer allowed to accept reais from customers, convert them into cryptocurrencies such as USDT, USDC, or bitcoin, and then settle the payments abroad using blockchain technology. However, the new rule does not prohibit cryptocurrency trading. 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. The updated resolution essentially closes the payment rail used by regulated eFX firms for cross-border transactions. This change primarily affects 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 facilitate fund transfers between Brazil and the U.S., settling the transactions in stablecoins, while Braza Bank has issued a real-backed stablecoin on the XRP Ledger. Brazil's cryptocurrency market currently processes between $6 billion and $8 billion in monthly transactions, with stablecoins accounting for approximately 90% of the total volume, according to data from Receita Federal. The country has seen significant growth in crypto adoption, ranking fifth globally in 2025, up from tenth position in the previous year. Approximately 25 million Brazilians hold or engage in cryptocurrency transactions. 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. Companies without authorization can continue operating but must submit their applications by May 31, 2027. Additionally, they are required to maintain segregated accounts for client funds and submit detailed monthly reports. On the other hand, Resolution 561 expands the scope of eFX in certain aspects. 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. The same limit applies to digital payment solutions that are not integrated with e-commerce platforms. This regulatory move marks the second front in a broader push to regulate the cryptocurrency market. In March, industry associations representing over 850 companies pushed back against the proposed extension of Brazil's IOF financial transaction tax to stablecoin operations. Brazil's regulator is essentially drawing a line for the coexistence of cryptocurrencies in the market, while restricting their use as infrastructure for eFX settlements.