Brazil is advancing in crypto regulation, introducing strict rules for stablecoins as the United States delays its bill. The Central Bank of Brazil has proposed strong controls over stablecoin transfers, seeking to improve transparency and user protection. These developments mark a new step in Brazil’s efforts to lead the global regulatory race in digital assets.

Brazil’s Central Bank Sets Firm Rules for Stablecoin Transfers

The Central Bank of Brazil has proposed new regulations that would restrict how stablecoins are transferred within the country. The proposal includes limiting transactions to self-custody wallets, especially when dealing with foreign-denominated stablecoins. The central bank’s framework is focused on reducing risks connected to digital assets, including fraud, lack of oversight, and money laundering.

According to local media outlet Valor Econômico, the new rules are part of Brazil’s wider plan to regulate virtual asset service providers (VASPs). These regulations are being developed in response to the passage of Brazil’s 2022 crypto law. The law gave the Central Bank of Brazil the authority to supervise and enforce rules on crypto asset transactions and services.

Stablecoins, often pegged to fiat currencies like the US dollar, have seen rising use across Brazil. The central bank sees this trend as a financial stability risk if left unchecked. In its proposal, the bank aims to ensure secure transfer mechanisms and introduce operational limits that protect users and maintain market order.

Coinbase Warns Brazil’s Rules May Harm Innovation

Global exchange Coinbase responded to Brazil’s earlier proposal in March 2024 with a public letter to regulators. The company argued that strict controls on stablecoin use could reduce access to financial tools and push users toward less regulated alternatives. Coinbase stated, “Overly restrictive measures may hurt transparency and limit consumer protection instead of improving it.”

In its comments, Coinbase also urged Brazilian authorities to adopt a balanced regulatory model. This would include clear rules but still allow for financial innovation and secure crypto access. Coinbase cited the importance of stablecoins in cross-border transactions, especially in countries with volatile fiat currencies.

Despite the opposition, Brazilian officials continued with their agenda. They revised and reintroduced the proposal, maintaining key provisions like restrictions on self-custody wallet transfers. The central bank aims to close regulatory gaps before further crypto adoption expands across Brazil’s financial ecosystem.

Brazil’s Crypto Strategy Surges Ahead of US Delays

Brazil’s regulatory actions come at a time when the United States has yet to pass the GENIUS Act. This bill, which would establish rules for stablecoins and their issuers, remains stalled in Congress. Legal experts like XRP attorney John Deaton have expressed concern about the U.S. delay, warning it may slow progress in global crypto leadership.

Meanwhile, Brazil is moving forward. The city of Belo Horizonte recently named itself the “Capital of Bitcoin.” In addition, Brazil became the first country to launch an exchange-traded fund (ETF) based on XRP. These developments signal the country’s wider strategy to integrate digital assets into its financial systems under government oversight.

Brazil’s active approach is attracting attention from analysts and regulators worldwide. The Central Bank’s effort to define rules for stablecoins and VASPs may become a model for emerging markets. The country’s move reflects a shift toward treating digital assets as part of national financial policy rather than just speculative tools.