Brazil's central bank bans stablecoin and crypto settlement in cross-border payments

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Brazil's central bank bans stablecoin and crypto settlement in cross-border payments The ban applies to fintechs and payment firms, closing the back-end payment rail for cross-border flows, but individual crypto investors can still buy and hold assets. What to know: - Brazil’s central bank banned electronic foreign exchange (eFX) providers from using stablecoins and other cryptos (like Bitcoin) to settle overseas remittances, effective October 1. - The ban applies to fintechs and payment firms, closing the back-end payment rail for cross-border flows, but individual crypto investors can still buy and hold assets. - EFX payments must now use foreign exchange transactions or non-resident real accounts. Unauthorized firms must apply for BCB approval by May 2027. Brazil's central bank has banned electronic foreign exchange (eFX) providers from using stablecoins, bitcoin or other cryptocurrencies to settle overseas remittances. BCB Resolution No. 561, published April 30, updates rules for eFX, Brazil's regulated system for digital international payments, purchases, withdrawals and transfers. The rule takes effect October 1, with adaptation deadlines running into 2027. Payments between an eFX provider and its foreign counterparty must move through a foreign exchange transaction or a non-resident real-denominated account in Brazil, with cryptocurrencies barred as an option. A remittance firm cannot take reais from a customer, convert the funds into USDT, USDC or bitcoin and settle the payment abroad on a blockchain. The rule does not ban crypto trading. Investors can still buy, sell, hold and transfer cryptocurrency through authorized virtual asset service providers under Resolution BCB No. 521, which took effect February 2. Resolution 561 closes the back-end payment rail used by regulated eFX firms. The change targets companies like Wise, Nomad and Braza Bank that had built stablecoin settlement into cross-border flows. Nomad, for example, uses Ripple's network to move funds between Brazil and the U.S. and settle in stablecoins, while Braza Bank issued a real-backed stablecoin on the XRP Ledger. Brazil's crypto market is moving $6 billion to $8 billion a month, with stablecoins accounting for roughly 90% of volume, per Receita Federal data. The country ranked fifth in global crypto adoption in 2025, up from tenth a year earlier. About 25 million Brazilians hold or transact in crypto. The resolution also restricts eFX to BCB-authorized institutions: banks, Caixa Econômica Federal, securities and FX brokers, and payment institutions acting as e-money issuers or acquirers. Firms without authorization can keep operating but must apply by May 31, 2027. They must use segregated accounts for client funds and file detailed monthly reports. Resolution 561 expands eFX in one direction. Providers can now handle transfers tied to financial and capital market investments in Brazil or abroad, capped at $10,000 per transaction. The same limit applies to digital payment solutions not integrated with e-commerce platforms. The rule is the second front in a broader regulatory push. In March, industry associations representing more than 850 companies pushed back against extending Brazil's IOF financial transaction tax to stablecoin operations. Brazil's regulator is drawing a line for crypto to exist in the market, but not as eFX settlement infrastructure. More For You The agreement necessitates firms restructure reward programs from a "buy and hold" to a "buy and use" model; however, CCI raised concerns over its broad prohibition. What to know: - Senators Thom Tillis and Angela Alsobrooks released a compromise on stablecoin yield in the CLARITY Act, banning yield equivalent to bank deposits but allowing "bona fide activities." - Crypto trade groups, including Coinbase and Circle, immediately backed the deal and urged the Senate Banking Committee to advance the market structure legislation.

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