Brazil blocks stablecoins from key cross-border payment rail as $1.1 trillion market faces new limits

Brazil's central bank will bar virtual assets, including stablecoins, from settling one specific type of international payment flow starting Oct. 1.Resolution 561 targets the settlement leg between regulated foreign-exchange providers and their overseas counterparties, requiring that leg to run through a licensed FX transaction or a qualifying non-resident real account.Individual international transfers using virtual assets remain permitted under Brazil's existing framework.ActivityStatus after Oct. 1Why it matterseFX providers netting and consolidating multiple international paymentsStill allowedThe core eFX aggregation model remains intactSettlement between eFX provider and foreign counterparty using stablecoins or other virtual assetsBarredThis is the specific shortcut Resolution 561 removesSettlement through licensed FX transactionAllowedKeeps the flow inside the formal FX systemSettlement through qualifying non-resident real accountAllowedProvides a regulated alternative settlement pathIndividual international transfers using virtual assetsStill allowedShows the rule is not a general stablecoin banA gap in stablecoins that the central bank decided to closeOscar Guillermo Farah...