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

The Central Bank of Brazil has implemented a ban on 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 regulatory framework for eFX, Brazil's digital international payment system, which encompasses 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 conducted through a foreign exchange transaction or a non-resident real-denominated account in Brazil, with the use of cryptocurrencies no longer being an option. This means that a remittance company can no longer accept reais from a customer, convert the funds into a stablecoin such as USDT or USDC, or bitcoin, and then settle the payment abroad using a blockchain. However, the new regulation does not prohibit crypto 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 took effect on February 2. Instead, Resolution 561 targets the back-end payment infrastructure used by regulated eFX firms. The change is expected to impact companies such as Wise, Nomad, and Braza Bank, which had incorporated stablecoin settlement into their cross-border payment flows. For instance, Nomad utilizes 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 is sizable, with monthly transaction volumes 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, with around 25 million Brazilians holding or transacting in cryptocurrencies. 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 apply by May 31, 2027, and use segregated accounts for client funds, while also filing detailed monthly reports. On the other hand, Resolution 561 expands the scope of eFX in one key area. Providers are now permitted 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 is part of a broader push to establish clear guidelines for the cryptocurrency market. In March, industry associations representing over 850 companies pushed back against proposals to extend Brazil's IOF financial transaction tax to stablecoin operations. By implementing these regulations, Brazil's regulator is effectively drawing a line for how cryptocurrency can exist and operate within the market, while excluding it from being used as a settlement infrastructure for eFX.