Brazil’s Central Bank Proposes Ban on Stablecoin Withdrawals to Self-Custody Wallets

The Banco Central do Brazil (BCB), the largest central bank in South America, has proposed legislation to ban stablecoin withdrawals to self-custody wallets. This move is part of the central bank’s efforts to amend several digital asset laws, including BCB Resolution No. 277 of 2022, which regulates virtual asset service providers in the foreign exchange market.

Reasons behind the proposal:

  • The growing trading volume and connections between digital assets and conventional financial instruments have led the government to regulate these withdrawals.
  • International forums have recommended the adoption of regulations and supervision compatible with the functionalities provided and the risks associated with such assets.
  • Concerns over interconnected traditional models, consumer and investor protections, prevention of illicit data purposes, and financial-macroeconomic stability have also been raised.

The proposal, which is open for public consultation until February 2, 2025, aims to determine the regulatory body in which stablecoin activities would be included under the foreign exchange market or subject to Brazilian capital abroad and foreign capital in the country.

Impact on Brazil’s Stablecoin Market

If the proposed regulations are implemented, the stablecoin market in Brazil will likely be impacted. As the second-largest cryptocurrency value market in Latin America after Argentina, Brazil is a significant market for stablecoins, particularly for the USDT stablecoin issuer Tether.

According to recent reports, Brazil accounts for 59.8% of stablecoin transactions, followed by Argentina at 61.8%, while the rest of the world averages 44.7%. The adoption of USDT stablecoin in Brazil has also risen significantly, accounting for 80% of the country’s crypto transactions in October.

“The topic has been widely discussed in international forums, which recommend the adoption of regulations and supervision compatible with the functionalities provided and the risks associated with such assets.”

Stay Up-to-Date with the Latest Crypto News

For more news and updates on the cryptocurrency market, visit Global Crypto News. Stay informed about the latest developments in the world of crypto and finance.

Post Views: 1