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Central Bank of Brazil considers ban on Stablecoin Wallet Transfers

Central Bank of Brazil considers ban on Stablecoin Wallet Transfers

  • Central Bank of Brazil wants to stop stablecoin withdrawals from exchanges to personal wallets.
  • This is part of a new crypto law to regulate the industry.
  • People can share their opinions until February 2025, but the bank can still move ahead with the plan.

Central Bank of Brazil Proposes Restrictions 

Brazils Central Bank (BCB) has proposed new rules that could change how people use stablecoins. The proposal suggests banning centralized crypto exchanges from letting users withdraw stablecoins, like Tether (USDT), to self-custody wallets. Users store their digital assets in these wallets instead of relying on a third party.

This plan is part of a larger effort to regulate cryptocurrencies, following a law passed in December 2022 that gave the BCB control over creating rules for the crypto industry. The proposal defines stablecoins as tokens denominated in foreign currencies and aims to limit their use between residents, even though Brazilian law already allows payments in foreign currencies.

Public Consultation Open Until February 2025

The Central Bank says this move is about adapting the financial system to handle digital assets while ensuring international financial flows remain stable. The BCB has opened a public consultation period until February 28, 2025, to gather feedback. However, the central bank can ignore public opinions and proceed with its plans.

If the proposal becomes law, crypto exchanges in Brazil will need a special foreign exchange license to offer stablecoin-related services. The rules also state that all crypto investments must follow the same regulations as traditional investments, whether entering or out of Brazil.

Stablecoins are a big part of Brazils crypto market. In September 2024 alone, $4.2 billion worth of crypto transactions were recorded, and stablecoins made up 71.4% of that, with Tether accounting for $2.77 billion.

These proposed rules could significantly impact how people and businesses in Brazil use stablecoins. While they aim to bring more security and order to the market, they may also make it harder for users to access their funds freely. The publics response and the Central Banks final decision will determine the future of stablecoins in Brazil.

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Read more: https://thenewscrypto.com/central-bank-of-brazil-considers-ban-on-stablecoin-wallet-transfers/

Text source: TheNewsCrypto – Blockchain & Cryptocurrency News M

Disclaimer: Financial information and news are not financial advice, read the disclaimer.
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