Brazil's Central Bank to Enforce Ban on Stablecoin Self-Custody as BRL Falls
Brazil's Central Bank Targets Stablecoins and Self-Custody
On November 29, the Brazil Central Bank (BCB) initiated a proposed regulation affecting stablecoins and self-custody wallets. This proposal arises as the BRAZILIAN REAL (BRL) depreciates markedly against the USD, stirring economic concerns.
Proposed Regulation for Stablecoin Control
The BCB's draft regulation emphasizes inclusion of virtual asset service providers (VASPs) under the foreign exchange (forex) market rules, particularly focusing on stablecoins linked to currencies like the USD, including popular options such as Tether (USDT).
- Stablecoin transfers to self-custodial wallets will be restricted.
- All transactions must occur within regulated platforms.
- This effort aligns stablecoin regulations with traditional financial protocols.
Surge in Stablecoin Usage in Brazil
Research by Chainalysis shows stablecoin value in Brazilian exchanges rose by over 200% year-on-year, highlighting their growing significance. This can illustrate the shift towards digital currencies and the potential ramifications of this proposed restriction.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.