Brazil Central Bank Restricts Crypto Settlement in Regulated Payment Rails

The Banco Central do Brasil (BCB) has implemented new restrictions on the use of virtual assets within the country's regulated international payment and transfer services. Under the newly published Resolution BCB No. 561, providers operating within the eFX framework are now barred from using cryptocurrencies or stablecoins for settlement purposes. This regulatory shift ensures that payments and receipts between eFX providers and foreign counterparties are conducted exclusively through traditional foreign exchange transactions or non-resident Brazilian real accounts. The move is part of a broader effort by the BCB to keep cross-border payment flows within supervised financial rails and away from unregulated digital asset channels. The resolution includes transitional provisions for providers not yet listed in approved categories, requiring them to seek authorization from the central bank by May 31, 2027. While the BCB has clarified that this is not a comprehensive ban on cryptocurrency transfers in Brazil, it effectively closes the regulated eFX channel to virtual assets. BCB Governor Gabriel Galipolo previously highlighted that approximately 90% of crypto flows in the country are linked to stablecoins, raising significant concerns regarding money laundering, taxation, and asset backing. Furthermore, the central bank has signaled that stablecoins issued by entities outside its regulatory perimeter could face stricter conditions or outright bans to prevent the fragmentation of the payments system and protect national monetary sovereignty.