Brazil’s Central Bank (BCB) has formally recommended to the National Assembly to ban or impose severe restrictions on stablecoins issued by foreign companies that are not subject to local supervision, such as Tether, the issuer of USDT.
The proposal is detailed in a technical note sent on 29 April 2026 and is intended to influence the final wording of Bill 4308/2024. This establishes a regulatory framework for digital assets. The largest economy in Latin America.
The document, signed by Fabio Araujo, head of the Real Digital Project (Brazil’s central bank’s CBDC), argues that the proliferation of stablecoins linked 1:1 to the US dollar represents a risk to monetary sovereignty and national payment systems.
In this sense, the financial authorities base their position on three pillars: Protection of substantial financial stability and a level playing field. According to BCB, companies issuing stablecoins from abroad currently operate without meeting the capital and transparency standards required of local financial institutions.
“The use of assets that do not provide prudential guarantees undermines the effectiveness of monetary policy and the integrity of payment systems,” the technical report emphasizes.
For users, the measure aims to close what regulators call a “legal loophole.” While traditional bank deposits have institutional backing, Cryptocurrencies issued outside Brazilian jurisdiction have no protection mechanisms If the issuer is likely to go bankrupt.
What would happen if stablecoins were banned in Brazil?
If the measure is approved by lawmakers, exchange platforms will limit or withdraw assets such as USDT and USD Coin (Circle) from offers. This decision is highly relevant as USDT is the main point of contact for Brazilians looking to protect their assets from exchange rate fluctuations.
In reality, these currencies areIt functions as an important infrastructure for domestic crypto asset trading.As noted in a recent opinion article published in CriptoNoticias, they also account for a large portion of the trading volume of local brokers throughout Latin America.
The digital asset community has raised concerns about what it sees as a restrictive approach. The industry’s central argument is that a ban would not stop the use of these assets, but would instead facilitate the relocation of operations to unregulated offshore platforms, as is happening in Venezuela, where the state would lose all control.
Similarly, they warn that the lack of access to these liquidity channels could increase operating costs for local companies and reduce Brazil’s competitiveness in the global fintech ecosystem.
Brazil’s position is part of a global trend. Regulations such as the European Union’s MiCA already require stablecoin issuers to maintain auditable reserves and a legal presence in the region. This discussion is now under the responsibility of the National Assembly. Brazil will decide whether to consolidate these assets under a licensing regime or if you choose to restrict access to internal markets.
The crossroads facing the Brazilian Congress fundamentally concerns the meaning of economic freedom in the 21st century. This is because, while central banks seek to protect the foundations of national economies, citizens want tools to navigate an increasingly digital and globalized world.
After all, regulatory success is not measured by the severity of the prohibition; the ability of the state to provide as accessible an alternative as possible; Just as stablecoins have been for millions of Brazilians. The challenge is to find a middle ground where system protection is not a barrier to progress.
(Tag Translation) Brazil
