The Central Bank of Brazil is drawing a hard line on how crypto can be used in the country’s financial system, effectively shutting stablecoins out of cross-border payments. Under Resolution No. 561, such transactions will need to go through traditional foreign exchange channels or be processed via non-resident Brazilian real accounts held in Brazil, with “the use of virtual assets being prohibited.”
The resolution will take effect on October 1, allowing licensed providers to continue operating under a new framework that was also adopted last week.
From there, licensed payment providers must settle cross-border transactions entirely in fiat currency, without any intermediate crypto settlement steps. The resolution also introduces enhanced reporting requirements, stricter Know Your Customer procedures, and mandatory data retention for up to ten years.
The Logic Behind the Move
Brazil’s tax authority, the Receita Federal, has raised concerns that stablecoin-settled cross-border transactions outside the central bank’s oversight, creating potential money laundering and tax compliance risks. In February, Brazil began classifying stablecoin transfers as foreign exchange transactions, bringing them under taxable frameworks. However, restricting their use now may also reduce a potential source of revenue.
Most stablecoins used in Brazil are denominated in U.S. dollars. Limiting their use gives authorities greater control not only over payment infrastructure but also over currency flows in and out of the country.
“Brazil isn’t banning stablecoins because they don’t work, it’s because they work so well,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “They allow money to move across borders outside the traditional banking system, which undermines capital controls, tax collection, and visibility into cross-border flows. This is less about payment optionality and more about maintaining control over its financial system. Stablecoins are effectively a parallel foreign exchange system, so they are shutting it down before it scales more.”
Who Is Affected?
Brazil has become one of the world’s largest users of stablecoins by transaction volume. The change will significantly impact Brazilian institutions such as Braza Bank, which has integrated stablecoin settlement into its cross-border payment systems. It will also affect crypto firms like the messaging protocol Nomad, which uses Ripple’s network to facilitate fund transfers between Brazil and the U.S.
The rule does not prohibit individuals from owning or trading crypto. Brazilians will still be able to buy, sell, and hold stablecoins and other digital assets. Brazil remains one of the largest crypto markets in Latin America and ranked fifth globally in Chainalysis’ Global Crypto Adoption Index in 2025.
