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

The Central Bank of Brazil has introduced a ban on the use of stablecoins and other cryptocurrencies for settling international transactions by electronic foreign exchange providers. This update, outlined in BCB Resolution No. 561, will come into effect on October 1 and will be fully implemented by 2027. The new rule dictates that payments between providers and their foreign counterparts must be conducted through traditional foreign exchange transactions or non-resident accounts denominated in local currency, effectively excluding cryptocurrencies as a viable option. Remittance companies are no longer allowed to convert customer funds into cryptocurrencies like USDT, USDC, or bitcoin for cross-border settlements. However, this regulation does not prohibit cryptocurrency trading, and investors can continue to buy, sell, and hold digital assets through authorized service providers. The move primarily targets companies that have integrated stablecoin settlements into their cross-border payment processes, such as Wise, Nomad, and Braza Bank. Brazil's cryptocurrency market processes between $6 billion and $8 billion monthly, with stablecoins accounting for approximately 90% of the volume. The country has seen significant growth in crypto adoption, ranking fifth globally in 2025. The resolution also imposes restrictions on electronic foreign exchange services, limiting them to authorized institutions and requiring firms to apply for authorization and adhere to stricter reporting and account segregation requirements by May 31, 2027. Additionally, the new rule expands the scope of electronic foreign exchange to include transfers related to financial and capital market investments, with a transaction limit of $10,000. This regulatory move is part of a broader effort to clarify the role of cryptocurrencies in Brazil's financial market, distinguishing their use for investment from their use as infrastructure for cross-border payment settlements.