Brazil’s Central Bank Restricts Use of Crypto in Cross-Border Payments
In a significant regulatory shift, the Banco Central do Brasil (BCB) has implemented Resolution No. 561, which prohibits the use of virtual assets in regulated cross-border electronic foreign exchange (eFX) settlements. This decision directly impacts remittance providers that previously relied on stablecoins for international transactions, while still allowing general trading of cryptocurrencies within Brazil.
Published on April 30, 2023, the BCB’s resolution alters the existing framework governing international payments, withdrawals, and transfers. It mandates that all transactions between eFX providers and foreign counterparties must be conducted through traditional foreign exchange methods or non-resident Brazilian real accounts—essentially eliminating the role of virtual currencies in these regulated payment systems.
Continued Legitimacy for Crypto Trading
Despite this new restriction, the BCB’s actions do not amount to a comprehensive ban on cryptocurrency in Brazil. Investors and companies are still permitted to engage in the buying, selling, and custody of digital assets under the existing regulatory framework. However, they cannot utilise these assets for settling international payments under the eFX system.
To ease the transition, international payment service providers operating without the BCB’s authorisation can continue for the time being, provided they submit an application for official approval by May 31, 2027. Additionally, current licensed providers of eFX services must re-register with the central bank’s Unicad system by October 30, 2026, ensuring compliance with the updated rules.
Operational Implications and Requirements
The resolution introduces several new operational requirements for eFX providers. These include the necessity of maintaining segregated accounts for client funds associated with eFX transactions, regular monthly reporting through the central bank’s foreign exchange system, and the retention of transaction records for a minimum of 10 years.
This regulatory environment may complicate operations for fintech companies that have engineered low-cost remittance solutions around stablecoins, such as Tether (USDT), which has dominated the local market, constituting roughly two-thirds of Brazil’s recorded crypto transactions in the first half of 2025. Bitcoin accounted for about 11% of the total activity.
Given that Brazilian regulators see the predominance of dollar-pegged stablecoins as a factor affecting cross-border payments, the new measures are likely to increase operational costs for fintechs. These entities must revert to traditional fiat payment methods, which could lead to longer processing times and greater fees associated with correspondent banking.
Conclusion
The BCB’s latest resolution signifies a tightening of regulations surrounding the use of cryptocurrencies in international payment systems. While this does not equate to a full prohibition on crypto activities, it imposes significant constraints on how virtual assets can be employed, particularly affecting those businesses that have thrived on the advantages of crypto for cross-border transactions. As Brazil navigates this transition, the impacts on the fintech landscape will be closely monitored by stakeholders in both the crypto and traditional finance sectors.
