Brazil bans stablecoins and crypto for overseas payments

Brazil has moved to restrict the use of stablecoins and cryptocurrencies in cross-border payments, banning electronic foreign exchange (eFX) companies from using digital assets to settle overseas remittances under new central bank rules.

Central bank tightens crypto payment rules

The new resolution from the Central Bank of Brazil prohibits eFX firms from using cryptocurrencies such as Bitcoin and stablecoins to complete international transfers. The ban is set to take effect on 1 October.

The regulation requires that payments between Brazilian firms and overseas counterparts be processed through traditional foreign exchange channels or via non-resident real-denominated accounts held in Brazil.

The rules also prevent remittance providers from accepting Brazilian reais, converting them into digital assets and settling transactions via blockchain networks.

While crypto trading itself remains legal, the policy is expected to impact companies that had integrated stablecoin-based settlement into their cross-border payment systems, including firms such as Wise.

Rapid growth of Brazil’s crypto market

The regulatory shift comes amid strong growth in Brazil’s digital asset sector. Data from the country’s federal revenue service indicates that crypto transactions total between $6 billion and $8 billion per month, with around 90 per cent of that volume driven by stablecoins.

Brazil ranks among the world’s leading markets for crypto adoption, with an estimated 25 million users engaging in digital asset transactions.

Stablecoins’ limited role in global payments

Despite their reputation as a disruptive force in cross-border finance, stablecoins currently represent only a small fraction of global payment flows.

Research highlighted by McKinsey & Company shows that most stablecoin payment activity is concentrated in markets such as Hong Kong, Japan and Singapore, with relatively limited usage in regions like Latin America and Africa.

Traditional payment systems evolving

Analysts note that many of the advantages associated with cryptocurrencies, including faster transactions, lower costs and greater flexibility, are increasingly being matched by improvements within traditional financial systems.

Advances such as real-time payment rails, reduced foreign exchange costs and the use of application programming interfaces (APIs) are transforming cross-border payments without requiring a shift to entirely new infrastructure.

Shift signals regulatory caution

Brazil’s latest move reflects a broader trend among regulators seeking to balance innovation with financial stability and oversight. In 2025, crypto transactions linked to human trafficking grew sharply, rising 85 percent compared to the previous year. Much of this activity was tied to scam compounds in Southeast Asia, where people were tricked with fake job offers and then forced to run fraud schemes under threats of violence.

In order to transfer money across borders, trafficking networks, including those connected to so-called “international escort” services, have been using stablecoins more and more. These flows have been tracked across nations including Brazil, the US, and the UK. Blockchain openness has made it possible for investigators to track the money despite the size of these operations, providing a unique opportunity to destroy the networks behind these crimes.