Brazil's Central Bank Prohibits Stablecoin and Crypto Transactions for Cross-Border Payments

The Central Bank of Brazil has prohibited the use of stablecoins and other cryptocurrencies for settling international remittances by electronic foreign exchange providers. Published on April 30, BCB Resolution No. 561 updates the regulations for Brazil's digital international payment system, which includes purchases, withdrawals, and transfers. The new rule will come into effect on October 1, with adaptation deadlines extending into 2027. All payments between an eFX provider and its foreign counterpart must now be made through a foreign exchange transaction or a non-resident real-denominated account in Brazil, with cryptocurrencies no longer being an 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 payment abroad on a blockchain. However, the new rule does not prohibit cryptocurrency trading. Investors can still 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 channel used by regulated eFX firms for cross-border transactions. The change primarily affects companies such as Wise, Nomad, and Braza Bank, which had incorporated stablecoin settlement into their cross-border payment flows. For instance, 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 currently processes between $6 billion and $8 billion per month, with stablecoins accounting for around 90% of the volume, according to data from Receita Federal. The country ranked fifth in terms of global crypto adoption in 2025, up from tenth the previous year, with approximately 25 million Brazilians holding or transacting in cryptocurrencies. The resolution also restricts eFX services to institutions authorized by the BCB, including banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions acting as e-money issuers or acquirers. Firms without authorization can continue operating but must apply by May 31, 2027, and use segregated accounts for client funds, as well as file detailed monthly reports. Resolution 561 expands the scope of eFX in one area, allowing providers to handle transfers related to financial and capital market investments in Brazil or abroad, with a limit of $10,000 per transaction. The same limit applies to digital payment solutions not integrated with e-commerce platforms. This move is the second front in a broader regulatory push. In March, industry associations representing over 850 companies pushed back against the extension of Brazil's IOF financial transaction tax to stablecoin operations. Brazil's regulator is establishing boundaries for the existence of cryptocurrencies in the market, but not as a settlement infrastructure for eFX.