Brazil Proposes Ban on Stablecoin Withdrawals to Wallets

The Central Bank of Brazil (BCB) has introduced a regulatory proposal that could change how people use stablecoins. The proposal would prevent users from withdrawing stablecoins to self-custodial wallets on centralized exchanges. 

This means that only certain transfers of stablecoins—referred to as “tokens denominated in foreign currencies”—will be allowed between residents in cases where Brazilian law already permits foreign currency payments.

The public consultation for the proposal is open until February 28, 2025. During this time, market participants can share their feedback with the regulator, though the BCB is not bound to follow all suggestions.

This proposed regulation would also require centralized exchanges to obtain a foreign exchange license to offer services related to stablecoins. Furthermore, crypto transactions—both inbound and outbound—would be regulated the same way as traditional investments, with compliance required for activities like foreign investment or crypto capital abroad.

Stablecoins are already a significant part of Brazil’s crypto market. According to Brazil’s Internal Revenue Service (RFB), Brazilians transferred $4.2 billion in crypto in September, with stablecoins accounting for a large portion—around $3 billion, mostly in Tether USD (USDT).

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