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

The Central Bank of Brazil has introduced a ban on the use of cryptocurrencies, including stablecoins and bitcoin, for settling international remittances by electronic foreign exchange providers. The new rule, outlined in BCB Resolution No. 561, published on April 30, updates the regulations for Brazil's digital international payment system and will come into effect on October 1, with adaptation deadlines extending into 2027. According to the new regulation, payments between an eFX provider and its foreign counterpart must be made 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 such as USDT, USDC, or bitcoin, and then settle the payment abroad using a blockchain. However, the new rule does not prohibit cryptocurrency trading, and 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 primarily targets the back-end payment infrastructure used by regulated eFX firms. Companies such as Wise, Nomad, and Braza Bank, which had incorporated stablecoin settlement into their cross-border payment systems, will be affected by the change. For instance, Nomad utilizes Ripple's network to transfer funds between Brazil and the US, settling the transactions in stablecoins, while Braza Bank has issued a real-backed stablecoin on the XRP Ledger. Brazil's cryptocurrency market is substantial, with monthly transactions 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 new 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. Companies without authorization can continue operating but must apply for authorization by May 31, 2027, and are required to use segregated accounts for client funds and submit detailed monthly reports. On the other hand, 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 cap of $10,000 per transaction. The same limit applies to digital payment solutions that are not integrated with e-commerce platforms. This new regulation is part of a broader effort to regulate the cryptocurrency market in Brazil. In March, industry associations representing over 850 companies pushed back against the proposed extension of Brazil's IOF financial transaction tax to stablecoin operations. The regulator is establishing clear boundaries for the coexistence of cryptocurrencies in the market, while preventing their use as infrastructure for eFX settlements.