Brazil proposes a ban on transferring Stablecoins to self-custody wallets

The Central Bank of Brazil (BCB) has put forward a proposal to ban the transfer of stablecoins to self-custody wallets from centralized exchanges. This aims to ensure compliance with existing financial regulations and to control digital assets, particularly "foreign currency-pegged tokens" like Tether (USDT) which are very popular in Brazil.

This proposal is also part of a larger effort to regulate the rapidly growing cryptocurrency sector in the country, thus helping the BCB to better oversee and manage the market. Stakeholders in the industry have until February 28, 2025, to provide feedback to the BCB regarding this proposal, although the BCB reserves the right to dismiss public opinions.

Additionally, Brazil's cryptocurrency market has seen significant growth, with stablecoins accounting for about 70% of total cryptocurrency transactions in September this year. The ban on transferring stablecoins to self-custody wallets could impact the development of the cryptocurrency market in Brazil, according to warnings from industry analysts.