Brazil Central Bank Clarifies Stablecoin Rules with Focus on Institutional Usage

Brazil's central bank has issued Resolution BCB 561, sparking confusion in the cryptocurrency community about the future of stablecoin usage.

The regulation aims to address concerns over tax compliance and anti-money laundering (AML) gaps by restricting eFX providers' use of stablecoins for international transfers. However, it does not affect individuals or institutions that buy, hold, or send stablecoins abroad.

Stablecoins drive 90% of Brazil's reported crypto-linked cross-border flows, which has raised concerns about foreign issuance without local oversight.

The regulation targets the institutional plumbing behind stablecoin usage, rather than the assets themselves. However, a technical note to Congress hints at tougher restrictions or bans on foreign-issued stablecoins in a pending bill.