The Central Bank of Brazil (BCB) has unveiled a regulatory proposal that would ban centralized exchanges from allowing users to withdraw stablecoins into self-custodial wallets.
According to the public consultation announcement, the transfer of stablecoins – called “tokens denominated in foreign currency” – would be restricted between residents in cases where Brazilian law already allows foreign currency payments.
The BCB shared in a statement:
“The initiative reflects our commitment to adapt the financial system to the reality of digital assets while ensuring the integrity of international capital flows.”
The move is part of the crypto regulation bill approved in Brazil in December 2022, which stipulated that the BCB is responsible for creating the regulations for the country’s crypto industry.
The public consultation is open until February 28, 2025 and market participants can share their views with the regulator. However, the BCB can override the input and do it as described in the document.
Balancing rules
According to Brazil’s central bank, the proposed rules are intended to increase legal certainty for companies and individuals while promoting competition and efficiency in the foreign exchange market.
The proposed regulation outlines three core activities for virtual asset service providers operating in the foreign exchange market: facilitating international payments and transfers via crypto, providing exchange or custody services for Brazilian reais-denominated tokens for non-residents, and managing of transactions involving tokens linked to foreign currencies.
Furthermore, crypto investments, both inbound and outbound, would be subject to the same regulatory standards as traditional investments. External credit, foreign direct investment, and Brazilian capital abroad involving cryptocurrencies require compliance with existing international capital regulations.
According to the public consultation, centralized exchanges should also obtain a currency license to offer stablecoin-related services.
An important market
This is evident from data from the Brazilian Internal Revenue Service (RFB). published as of November 13, nearly 4.4 million Brazilians transferred $4.2 billion worth of crypto in September.
Stablecoins represented 71.4% of all value transferred during the month, with approximately $3 billion traded. Tether USD (USDT) dominated with $2.77 billion moved by Brazilian crypto investors.
