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. This new rule, outlined in BCB Resolution No. 561 published on April 30, updates the regulations for Brazil's digital international payment system. The changes will come into effect on October 1, with a phased implementation schedule extending into 2027. Under the new rule, 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 an option. This means that remittance companies cannot convert customer funds into cryptocurrencies like USDT, USDC, or bitcoin to settle payments abroad on a blockchain. However, the rule does not prohibit cryptocurrency trading, and investors can still buy, sell, hold, and transfer cryptocurrencies through authorized virtual asset service providers. The new regulation primarily targets companies that have incorporated stablecoin settlement into their cross-border payment flows, such as Wise, Nomad, and Braza Bank. Brazil's cryptocurrency market processes between $6 billion and $8 billion monthly, with stablecoins accounting for around 90% of this volume. The country has seen significant growth in crypto adoption, ranking fifth globally in 2025, up from tenth the previous year, with approximately 25 million Brazilians involved in crypto transactions. The resolution also imposes restrictions on eFX providers, limiting them to BCB-authorized institutions and requiring firms without authorization to apply by May 31, 2027. Additionally, it expands the scope of eFX to include transfers related to financial and capital market investments, subject to a $10,000 per transaction limit. This regulatory move is part of a broader effort to define the role of cryptocurrencies in Brazil's financial market, drawing a clear line between their permitted use and their exclusion from certain financial infrastructure.