Brazil Blocks Stablecoin Settlement for Key Cross-Border Payments

Brazil's central bank has announced that it will block stablecoins from settling one specific type of international payment flow starting October 1. The decision targets the settlement leg between regulated foreign-exchange providers and their overseas counterparties, requiring that leg to run through a licensed FX transaction or a qualifying non-resident real account.

This move affects eFX providers who net and consolidate multiple international payments. While individual international transfers using virtual assets remain permitted under Brazil's existing framework, the specific combination of stablecoin settlement with bulk aggregation is being removed.

The resolution directly closes an ambiguity in Brazil's 2022 virtual assets law, which gave the central bank authority to decide which crypto operations count as foreign-exchange activity. However, specific rules never followed, leaving a gap some market participants used to their advantage.

According to Oscar Guillermo Farah Osorio, founding partner at Zanella & Farah, the new resolution gives the central bank clearer visibility into flows it previously could not fully see within the formal exchange system.