Brazil Central Bank Signals Easing of Crypto and Stablecoin Rules

Banco Central do Brasil Signals Softer Rules on Self-Hosted Crypto Wallets and Stablecoin Transactions After Industry Feedback

  • Banco Central do Brasil is considering a softer stance on self-hosted wallets and cross-border cryptocurrency use after industry feedback.
  • Initial proposals aimed to restrict these activities to authorized providers and block self-custody wallet transactions for international payments.
  • Officials now say service providers might be able to monitor self-custody users, allowing more flexibility.
  • There is ongoing debate about classifying stablecoin transactions between local residents as foreign exchange, especially when priced in Brazilian reais.
  • Authorities remain concerned about oversight and volatility risks from cross-border stablecoin transfers, as many issuers operate outside Brazil.

Banco Central do Brasil announced that it may relax some of its proposed cryptocurrency and cross-border payments rules. The central bank made the announcement after gathering input from the market in a consultation started late last year.

- Advertisement -

Previously, the bank wanted only authorized virtual asset service providers, or VASPs, to manage cross-border cryptocurrency payments and prevent self-hosted wallet transactions. Self-hosted wallets allow users to control their own private keys and assets, instead of using a third-party service.

At a recent event, Eduardo Nogueira Liberato de Sousa from Banco Central do Brasil said the bank now sees room for more flexibility. “As we realize that service providers can monitor the quality of self custody clients, we see room for flexibility. The important thing is to hold the institution accountable for getting to know the client who uses self custody,” he said, as reported by Valor Econômico. This approach is similar to Europe’s current policy on self-custody in crypto.

Brazilian law presently bans using foreign currencies for local transactions. The central bank planned to extend this to stablecoins, which are cryptocurrencies pegged to stable assets like the dollar or Brazilian real. Sousa told BlockTrends that the bank is reconsidering this ban, particularly when Brazilian residents trade between self-custody wallets and set prices in local currency. “We are evaluating whether this prohibition makes sense. Especially in cases where the transaction takes place between self custody wallets of residents and the price is set in reais. The question is whether this should, in fact, be classified as a foreign exchange transaction,” Sousa explained.

Most crypto exchanges host global order books, where buyers and sellers from different countries participate, making these transactions cross-border by nature. Sousa acknowledged that this global activity can help set fair prices.

Regulatory discussions are driven by stablecoin oversight concerns. Deputy Governor Renato Gomes said at a separate event that cross-border stablecoin transfers are risky because they bypass the usual checks required for exchanging local currency to U.S. dollars during overseas transfers, as Reuters reported. “Capital flows become more volatile,” Gomes said, noting that stablecoins allow nearly anyone to move money in and out of Brazil quickly.

Another challenge is that many major stablecoin issuers are based outside Brazil, such as the leading real-backed stablecoin issued from Switzerland, which reduces domestic oversight.

- Advertisement -

With areas like Europe, Hong Kong, and the United States introducing new stablecoin rules, regulators warn that global, unrestricted stablecoin movement may soon end. Nevertheless, as long as issuers manage legal complexities, users could still experience simple and direct transactions with stablecoins.

✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.

Previous Articles:

- Advertisement -

Latest News

Ondo Rises 1.5% as Tokenized Stocks Alliance Gains Strength

Ondo rose 1.5% to $0.77 over the past 24 hours, maintaining gains after a...

Donkey Kong Bananza Launches July 17 for Nintendo Switch 2

Several major video game releases are scheduled for July 2025, featuring both new titles...

Bitcoin Nears All-Time High Weekly Close as Bulls Regain Control

Bitcoin approaches $109,000, nearing its highest-ever weekly closing value. Market volatility increases as Hyperliquid’s James...

Kenya Crypto Bill Sparks Fears of Binance-Linked Regulatory Bias

Kenyan crypto firms are worried that proposed regulations could give a Binance-linked group too...

REX Shares Set to Launch First Solana Staking ETF After SEC OK

REX Shares prepares to launch the first U.S. exchange-traded fund (ETF) featuring Solana staking.The...

Must Read

10 Best Crypto Audiobooks You Don’t Want to Miss

So, you are getting tired of reading books and you want to switch to audiobooks that talk about cryptocurrencies. Well, today we are going...