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

The Central Bank of Brazil has imposed a ban on the use of cryptocurrencies, including stablecoins and bitcoin, for settling international remittances by electronic foreign exchange providers. The new regulation, outlined in BCB Resolution No. 561, which was published on April 30, updates the rules governing digital international payments, purchases, and transfers in Brazil. The regulation will come into effect on October 1, with adaptation deadlines extending into 2027. According to the new rules, transactions 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. This means that remittance companies can no longer accept reais from customers, convert them into cryptocurrencies like USDT, USDC, or bitcoin, and then settle the payments abroad using a blockchain. However, the regulation 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 new regulation essentially closes the back-end payment rail that regulated eFX companies had been using. The change primarily affects companies such as Wise, Nomad, and Braza Bank, which had incorporated stablecoin settlement into their cross-border transactions. For instance, Nomad utilizes Ripple's network to transfer funds between Brazil and the U.S. and settles the transactions using stablecoins, while Braza Bank has issued a real-backed stablecoin on the XRP Ledger. Brazil's cryptocurrency market processes between $6 billion and $8 billion monthly, with stablecoins accounting for approximately 90% of the volume, according to data from Receita Federal. The country ranked fifth in global cryptocurrency adoption in 2025, up from tenth the previous year, with around 25 million Brazilians holding or transacting in cryptocurrencies. The resolution also restricts eFX 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. Companies without authorization can continue operating but must apply by May 31, 2027, and are required to use segregated accounts for client funds and submit detailed monthly reports. Resolution 561 expands the scope of eFX in one aspect, allowing providers 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 not integrated with e-commerce platforms. This regulation represents the second front in a broader push for regulatory oversight. 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 essentially drawing a line for the coexistence of cryptocurrencies in the market, while restricting their use as infrastructure for eFX settlements.