Brazil bans crypto use within official cross-border payment network

Brazil's Central Bank (BCB) has tightened its control over cryptocurrency fund flows by banning the use of virtual assets for settling international payments. According to a resolution announced on Thursday, regulated electronic foreign exchange (eFX) providers must now use only traditional foreign exchange transactions or non-resident real-denominated accounts for overseas transfers, prohibiting the use of virtual assets. The measure is not intended as a blanket ban on cryptocurrencies but aims to block the inflow of assets like stablecoins into the regulated payment system to enhance the efficiency of foreign exchange supervision. Brazilian authorities determined that 90% of cross-border remittances are linked to stablecoins, which they believe increases the risk of tax evasion and money laundering. The central bank also expressed concern that stablecoins issued abroad without its oversight could undermine the nation's monetary sovereignty, signaling that it may move to expel them from the domestic market or impose strict restrictions in the future.