Brazil Enforces Fiat-Only Cross-Border Payments, Excludes Crypto
- On April 30, the Central Bank of Brazil issued Resolution No. 561, banning the use of cryptocurrency in cross-border payments.
- The regulation mandates fiat currency for all foreign exchange flows starting October 1.
- This move aims to enhance security and transparency by aligning with global standards to prevent financial crimes.
- Economist Victor Alfa highlights that this decision limits the efficiency and cost benefits of using crypto assets like stablecoins.
The Central Bank of Brazil’s new regulation prohibits the use of cryptocurrencies in its regulated cross-border payment system, requiring fiat transactions instead to improve oversight and security measures.
By enforcing fiat-only transactions, Brazil aims to ensure total traceability and direct supervision over foreign exchange flows, impacting firms that benefited from on-chain efficiencies. (Source)
