In July, the IMF warned that cross-border crypto flows in Brazil are growing faster than traditional capital flows and faster than nominal GDP. It also noted that 71.7 per cent of all reported crypto activity in Brazil over the last six years relates to stablecoins.
Reported by Consejeros Editorial Team
On 28 July, the International Monetary Fund (IMF) warned that Brazil’s crypto-asset market, particularly stablecoins pegged to the US dollar, has expanded rapidly since 2017 and requires closer supervision, as cross-border cryptocurrency flows are growing faster than traditional capital flows.
According to the organisation, stablecoins have played a key role in the significant growth of Brazil’s crypto-asset market. The report indicated that cross-border cryptocurrency flows “have risen steadily” and that purchases of stablecoins are between two and three times more sensitive to global shocks than traditional portfolio investment or foreign direct investment flows.
In fact, the IMF report documents that cross-border crypto flows in Brazil are growing faster than traditional capital flows and faster than nominal GDP. It also states that 71.7 per cent of all reported crypto activity in Brazil over the last six years relates to stablecoins, i.e. digital dollars.
Against this backdrop, last Friday the Central Bank of Brazil published a resolution introducing a mandatory 24-hour delay on certain cryptocurrency transfers, as a measure to prevent fraud. The measure aims to give institutions time to assess the risk of transactions, extending the rules that already applied to traditional payments to virtual assets.
Resolution 584
Resolution 584, published on Friday, amends the rules on fraud prevention for payment services and now covers virtual asset services. The requirement applies to transfers exceeding $10,000, whether in a single transaction or as the sum of a customer’s transactions on the same day.
The regulation covers transfers to foreign entities operating in the virtual asset market and to self-custody wallets. These transactions must be held for 24 hours whilst the institutions carry out a risk assessment.
The resolution describes the hold as a purely precautionary measure, designed to mitigate fraud. It does not imply that the funds will be permanently unavailable, and affected customers must be notified of the hold and its duration.
Once the 24 hours have elapsed, institutions must either release the transfer immediately or reject it. Early release is also permitted, but only if the institution makes a reasoned and documented decision, based on specific risk management criteria.
The rule applies tovirtual asset services as defined by Brazilian law, including virtual assets pegged to fiat currencies, such as stablecoins. This extension makes the resolution a benchmark for other countries in the region.
Practical procedure
Users making transfers that exceed the threshold must wait at least 24 hours for their funds to become available. Institutions are obliged to clearly communicate the reason for the hold and the timeframe.
During the assessment, the funds remain in the institution’s custody, but are not permanently frozen. If the institution identifies any risk, it may reject the transaction, either by returning the funds or notifying the user of the cancellation.
