Brazil bans stablecoins for key cross-border FX settlement

Brazil’s central bank will bar stablecoins and other virtual assets from settling the foreign-exchange settlement leg between regulated FX providers and overseas counterparties from Oct. 1, under Resolution 561. The rule requires that final settlement move through a licensed FX transaction or a qualifying non-resident real account. Individual international transfers using virtual assets remain permitted.

The eFX model used by some providers lets firms net many small payments across a day and then settle once with a foreign counterparty. After Oct. 1 providers may continue to net and consolidate balances, but they cannot use stablecoins or other virtual assets for the final settlement leg with a foreign counterparty. That last leg must pass through an authorized FX channel or a qualifying non-resident real account.

The central bank framed the requirement as a way to keep large aggregated flows inside regulated FX channels it can monitor. Brazil’s 2022 virtual-assets law gave the central bank authority to classify which crypto operations count as foreign-exchange activity; Resolution 561 provides a specific operational rule for aggregated eFX settlements.

Oscar Guillermo Farah Osorio, founding partner at Zanella & Farah, described the resolution as removing one settlement method while leaving the consolidated eFX model intact when firms route final settlements through permitted channels. He noted that the combination of bulk aggregation and stablecoin settlement had supplied much of the cost advantage used in some cross-border flows.

Brazil’s tax authority reported R$1.13 trillion in declared stablecoin transactions from August 2019 through December 2025, about 72% of declared crypto activity in that period. Stablecoins made up close to 80% of declared crypto volume in 2025, and USDT represented nearly 89% of declared stablecoin activity that year.

A Bank of Italy test of $200 USDC transfers across ten corridors, including Brazil, found total costs ranging from about 0.3% to nearly 9% and no consistent cost advantage for on-chain settlement over conventional channels. The study found blockchain transfer fees were a small share of total cost; currency conversion and local payment infrastructure were the main drivers. Where instant payment rails existed, settlement finished in under 20 minutes; in other corridors it stretched to one or two business days. The Financial Stability Board reported similar findings earlier in the year.

Brokers and FX firms are adapting by using hybrid architectures that mix bank money and stablecoins for treasury functions, liquidity movement between entities and internal settlement. Shawn Yan, CEO of Cregis, warned that firms must plan for differing stablecoin treatment across jurisdictions and manage wallet location, transaction speed and internal approvals accordingly. “You can’t build the model around one assumption about how stablecoins will be treated everywhere,” he said.

Industry participants expect larger firms to seek formal permissions or partner with licensed institutions and to build compliance workflows around the new requirement. Stablecoins are likely to remain in use for treasury and cross-border liquidity outside the restricted eFX settlement leg. Smaller payments firms that relied on the combination of bulk aggregation and stablecoin settlement may need to change their models if the mandated settlement path increases costs.