The International Monetary Fund said Brazil's cross-border crypto flows are growing faster than traditional capital flows, with US dollar-pegged stablecoins driving the expansion. Its Financial System Stability Assessment found stablecoin purchases are two to three times more sensitive to global shocks than portfolio investment or foreign direct investment. The fund asked for stronger rules rather than restrictions.
The International Monetary Fund said Brazil's crypto asset market requires closer oversight because cross-border crypto flows grow faster than traditional capital flows. US dollar-pegged stablecoins sit at the centre of that market. The fund said it has grown rapidly since 2017, with stablecoins playing a key role in that growth.
Stablecoin purchases react two to three times more sharply to global shocks
The report said stablecoin purchases are two to three times more sensitive to global shocks than traditional portfolio investment or foreign direct investment flows. According to the IMF's Financial System Stability Assessment, released Thursday, Brazil's crypto-asset market is "large and fast-growing, and increasingly interconnected with the traditional financial system".
Yet the fund did not call for restrictions on stablecoins. It instead recommended strengthening the regulatory framework as crypto markets become more integrated with existing payment and financial infrastructure.
Gaps remain in customer protection and AML rules
Even so, Banco Central do Brasil has already taken steps to regulate crypto asset service providers, the IMF said, but gaps remain in customer asset protection, stablecoin issuance rules and anti-money laundering and counter-terrorist financing compliance. Earlier comments from BCB Governor Gabriel Galípolo pointed to stablecoins accounting for about 90% of the country's reported crypto flows, with regulators monitoring possible tax, money laundering and reserve-related risks.
April resolution keeps digital assets out of regulated payment channels
In April, meanwhile, the central bank published Resolution BCB No. 561, amending rules for electronic foreign exchange (eFX) providers and prohibiting the use of digital assets for certain international payment and transfer services. Payments and receipts between eFX providers and foreign counterparties must instead be conducted through foreign exchange transactions or movements in non-resident Brazilian real accounts.
Under transitional provisions, firms that have not yet received eFX authorization can keep operating if they apply for central bank approval before May 31, 2027, and they must still comply with the same settlement restrictions during the transition.
Separately, in technical comments submitted to Brazil's Congress, the BCB warned that offshore-issued stablecoins, particularly real-denominated tokens beyond its oversight, could raise concerns around monetary sovereignty, regulatory consistency and capital flows.
Sources: IMF, Cointelegraph, crypto.news
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