Recently, the Central Bank of Brazil (Banco Central do Brasil, BCB) officially proposed a controversial proposal to ban the transfer of stablecoins (such as Tether USDT) to self-custody wallets (such as MetaMask or Trezor). This has sparked widespread discussion within the industry.
Surge in stablecoin usage, increased regulatory pressure
As the Brazilian real continues to depreciate, there is a surge in local demand for dollar-pegged stablecoins, which are seen as an important tool for hedging exchange rate risks. According to the BCB's proposal, the ban aims to prevent stablecoin transactions from occurring outside regulated platforms, especially at the point-to-point (P2P) transaction level.
Carol Souza, co-founder of the cryptocurrency education platform Area Bitcoin, pointed out that since 2019, Brazilian cryptocurrency exchanges have implemented strict Know Your Customer (KYC) regulations. However, P2P transactions still evade these regulatory requirements. She predicts that if the BCB insists on this direction after public consultation, the ban may be officially implemented in 2025. She criticized:
"This once again demonstrates how the government maintains demand for depreciating fiat currency by prohibiting free market transactions."
The challenges of enforcing the ban are numerous
Lucien Bourdon, a Bitcoin analyst at Trezor, stated that while the government can effectively regulate centralized exchanges, controlling P2P transactions and decentralized platforms is nearly impossible. He believes that even if the ban is implemented, it can only cover a part of the overall cryptocurrency ecosystem.
Bourdon noted:
"If the ban is passed, users will naturally turn to decentralized platforms or P2P solutions, a trend that has already occurred in other countries multiple times."
In Nigeria and China, similar bans have instead driven users to migrate to decentralized trading platforms (such as Uniswap) and P2P markets.
Tether calls for cooperation and balance
As the issuer of the world's largest stablecoin USDT, Tether CEO Paolo Ardoino expressed concern over Brazil's proposal. He pointed out that the policy could pose practical enforcement challenges and inadvertently harm the interests of Brazilian consumers.
Ardoino emphasized that Tether will work with Brazilian regulators to promote a regulatory framework that strikes a balance between innovation and consumer protection. He stated:
"We believe that prudent regulatory policies will help Brazil maintain its leadership in the digital asset space and meet the actual needs of the economy and the public."
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