Brazil’s Central Bank Bans Stablecoins and Cryptocurrencies for International Remittances
Brazil’s central bank has prohibited electronic foreign exchange (eFX) providers from using stablecoins, Bitcoin, and other cryptocurrencies to facilitate international remittances.
A new regulation, referred to as BCB Resolution No. 561, was released on April 30. This updated the framework for eFX, which governs digital international payments, purchases, withdrawals, and remittances in Brazil. The rules will come into force on October 1 and remain effective until 2027.
According to the new guidelines, payments from eFX providers to foreign entities must occur through traditional foreign exchange transactions or real-denominated accounts held by non-residents. Virtual currencies are explicitly prohibited for these transactions.
Companies that handle money transfers can’t take reals from clients, convert them into USDT, USDC, or Bitcoin and then settle those payments via blockchain systems abroad.
However, it’s noteworthy that the regulation does not ban trading in virtual currencies. Investors can still buy, sell, hold, and transfer cryptocurrencies with licensed digital asset service providers, as per Resolution BCB No. 521 from February 2. Resolution 561 primarily restricts the backend payment operations of regulated eFX firms.
The new rules are aimed at companies like Wise, Nomad, and Braza Bank, which have utilized stablecoin payments in international transactions. For instance, Nomad leverages Ripple’s network for fund transfers between Brazil and the U.S., while Braza Bank has introduced physically backed stablecoins on the XRP Ledger.
Brazil’s cryptocurrency market sees between $6 billion and $8 billion in monthly activity, with stablecoins making up roughly 90% of that volume, according to information from the Federal Republic of Receita. The nation is projected to rank fifth globally in cryptocurrency adoption by 2025, up from tenth the previous year. Around 25 million Brazilians are involved in cryptocurrency trading.
The resolution confines eFX operations to institutions approved by the central bank, including banks, Caixa Economica federations, brokers, and clearinghouses that act as issuers or acquirers of electronic money. While unlicensed entities can continue to operate, they must apply for approval by May 31, 2027. Moreover, customers will need to maintain segregated accounts and provide detailed monthly reports.
Resolution 561 advances eFX in a singular direction, allowing providers to manage remittances related to financial capital market investments both inside and outside Brazil, with a limit of $10,000 per transaction. The same guidelines apply to digital payment solutions that aren’t linked to e-commerce platforms.
This regulation represents the second phase of broader regulatory measures. Earlier in March, an industry group with over 850 member companies opposed extending Brazil’s IOF financial transaction tax to include stablecoin operations.
Brazilian regulators have clearly defined the boundaries for cryptocurrency operations in the market, but have opted not to include them as part of eFX payment systems.
