The Banco Central do Brasil has taken a significant step in regulating the use of cryptocurrencies by issuing Resolution No. 561. This new regulation aims to curb the growing trend of crypto usage in cross-border payments, particularly in light of the rising popularity of stablecoins in the country, as stated in the official source.
New Resolution on Cross-Border Payments
Under the new resolution, all regulated cross-border payment frameworks will be prohibited from utilizing cryptocurrencies. Instead, international transfers must be conducted solely through official foreign exchange transactions or nonresident Brazilian real accounts. This move is a direct response to the alarming increase in crypto transactions, which have seen stablecoins represent approximately 90% of crypto flows in Brazil.
Concerns Raised by Banco Central do Brasil
The Banco Central do Brasil has expressed concerns over various issues related to cryptocurrencies, including:
- taxation
- potential money laundering activities
- the adequacy of backing for these digital assets
As a result, eFX providers currently employing virtual assets for cross-border settlements will be required to overhaul their operations to comply with the new regulations.
Transition Deadline for Compliance
To facilitate this transition, the central bank has set a deadline of May 31, 2027, for these providers to seek the necessary authorization. This regulatory shift marks a pivotal moment in Brazil's approach to digital currencies, emphasizing the need for oversight in the rapidly evolving financial landscape.
The European Central Bank recently advocated for centralized oversight of crypto markets, contrasting with Brazil's new regulations on cross-border payments. For more details, see read more.
