Brazil seeks to impose limits on stablecoin transfers to self-managed digital wallets, as well as other cryptocurrency foreign exchange restrictions.

The Banco Central do Brasil has published a consultation outlining proposed restrictions on cryptocurrency transactions and self-hosted wallets, aiming to prevent the use of these platforms for circumventing reporting on cross border payments.

According to the proposal, only virtual asset service providers (VASPs) authorized to deal in foreign exchange can conduct cryptocurrency transactions for cross border payments and foreign exchange purposes. This includes the planned ban on the transfer of foreign currency stablecoins to domestic self-hosted wallets.

The use of foreign currency stablecoins for domestic payments is also to be restricted, as per the Banco Central do Brasil's proposal. If money can be transferred to self-hosted wallets, it can potentially be transferred abroad without any reporting, according to the article. This proposed restriction has attracted attention from the cryptocurrency community.

However, the response from the community is not detailed in the provided paragraph. It's also worth noting that the proposal does not specify a timeline for the implementation of these restrictions.

The central bank's intention, as suggested by the proposal, is to keep tabs on cross border payments. The self-hosted wallet restriction in the Banco Central do Brasil's proposal has been reiterated throughout the document to ensure clarity.

One company, Félix, has recently received authorization to handle FX transactions related to cryptocurrencies for cross-border and FX payments. Félix uses stablecoins and AI-driven remittances to lower costs, increase transaction speed, and expand access to underserved markets, partnering with Stripe to achieve a high authorization rate and cost savings.

It's important to note that the Banco Central do Brasil's proposal does not apply to all cryptocurrency transactions. For those interested in deeper insights, complete articles, exclusive industry analysis, and early access to legislative updates, pro subscribers can access a service offering these benefits.

Stay tuned for more updates on the Banco Central do Brasil's cryptocurrency regulations and their impact on the industry.

Brazil seeks to impose limits on stablecoin transfers to self-managed digital wallets, as well as other cryptocurrency foreign exchange restrictions.