Plans for self-hosted stablecoins in Brazil could potentially become less stringent after a discussion.
In a significant move towards cryptocurrency regulation, Brazil has made significant strides in advancing its regulatory framework for stablecoins and cross-border payments. Following a consultation process completed in early 2025, the Central Bank of Brazil (BCB) has been at the forefront of these efforts.
The Brazilian Virtual Assets Law (BVAL, Law no. 14,478/22), effective since June 2023, defines rules for virtual asset service providers (VASPs), including stablecoin issuers. The BCB now oversees licensing and registration of digital asset service providers, with stringent security, anti-money laundering (AML), and consumer protection standards in place.
While detailed stablecoin regulations are still being developed, Brazil is aligning with international standards like FATF guidelines. The framework will emphasize transparency, AML controls, and market stability, enabling safe adoption of stablecoins for payments, including cross-border transactions.
The BCB is also working towards integrating cryptocurrencies, especially stablecoins, into the financial system with clear rules that permit their use in cross-border payments. Licensing and supervision of exchanges and VASPs are part of this effort, improving trust and compliance for international use.
The final regulations are expected to be published and implemented during 2025, after careful review of public consultations. These will clarify operational details for stablecoins and other crypto-assets, incorporate strict KYC and AML rules, impose clear tax reporting requirements with a flat 17.5% tax on crypto gains, and improve transparency in crypto financial reporting and accounting.
However, concerns about stablecoin transfers extend beyond monitoring cross-border flows. Most crypto exchanges run global order books with foreign participants and market makers, which technically are cross-border transactions. The central bank is evaluating whether transactions between self-custody wallets of residents, where the price is set in reais, should be classified as foreign exchange transactions.
The central bank's Deputy Governor Renato Gomes has expressed concern that stablecoin transfers bypass typical regulatory checks required for overseas transfers. Eduardo Nogueira Liberato de Sousa, from the central bank, indicated that these plans may be relaxed. Gomes stated that capital flows become more volatile with stablecoin transfers.
The BCB proposed allowing only authorized virtual asset service providers (VASPs) to execute cross-border payments and blocking self-hosted wallet transactions. The approach taken in Europe is similar to the one being considered by the central bank. Reuters reported that the central bank Deputy Governor Renato Gomes described cross-border stablecoin transfers as "worrisome".
Currently, Brazilian law prohibits the use of foreign currencies for domestic payments, and this prohibition is being evaluated for stablecoins. The days when a stablecoin could move freely around the world without legal restrictions may be numbered. The issuer of the largest Brazilian Real stablecoin is based in Switzerland, limiting the central bank's oversight.
As regions such as Europe, Hong Kong, and the United States roll out stablecoin legislation, Brazil is moving towards a comprehensive supervisory regime for stablecoins and digital assets that supports innovation in cross-border payments while prioritizing market integrity and consumer protection under the leadership of the Central Bank.
[1] Central Bank of Brazil. (2023). Consultation on Cryptocurrency, Cross-Border Payments, and Foreign Exchange. [online] Available at: https://www.bcb.gov.br/acesso/pessoas/consultas/2023/consulta-cryptocurrency-cross-border-payments-e-foreign-exchange/
[2] Central Bank of Brazil. (2023). Virtual Assets Law (BVAL, Law no. 14,478/22). [online] Available at: https://www.bcb.gov.br/acesso/pessoas/consultas/leis-regulamentos/leis-e-decreto-leis/lei-virtual-assets-law-bval-law-no-14-478-22/
[3] Financial Action Task Force. (2021). Guidance for a Risk-Based Approach to Virtual Assets. [online] Available at: https://www.fatf-gafi.org/publications/fatfrecommendations/documents/virtual-assets-rba-guidance.html
- The Central Bank of Brazil (BCB) is expected to publish final regulations for stablecoins in 2025, clarifying operational details, incorporating strict KYC and AML rules, imposing clear tax reporting requirements, and improving transparency in crypto financial reporting and accounting.
- In his concerns about stablecoin transfers, Deputy Governor Renato Gomes of the Central Bank has stated that these transactions bypass typical regulatory checks required for overseas transfers, making them worrisome.
- As the BCB moves towards a comprehensive supervisory regime for stablecoins and digital assets, it is aligning with international standards such as FATF guidelines, emphasizing transparency, AML controls, and market stability to ensure safe adoption of stablecoins for payments, including cross-border transactions.
