The Central Bank of Brazil proposed a 24-hour holding period for stablecoin transactions exceeding $10,000 in value, targeting cross-border payments and remittances. The measure allows virtual asset service providers to conduct risk analysis and due diligence procedures during the hold window. Interested parties have until July 2 to submit commentary on the proposed rule, which forms part of Brazil's regulatory framework for stablecoin use in international transfers.
Central Bank of Brazil Introduces 24-Hour Hold for Stablecoin Transfers
The Central Bank of Brazil introduced a notice of rulemaking to implement a 24-hour hold window for remittances and cross-border payments sent using stablecoins. The hold period applies to stablecoin transactions of over $10,000 in value.
Exchanges and service providers would use the holding period to conduct risk analysis of the movements and verify their compatibility with the risk profile of the customer involved. The bank stated that the hold period would not be absolute and that funds could be released in a shorter timeframe if the intermediating VASP manages to address the risks of the specific transaction before.
"The retention is exclusively precautionary in nature and is intended for risk analysis of the respective operation, not implying the definitive unavailability of assets," the bank stated.
Proposal Targets Business-to-Business Stablecoin Transactions
The impact on retail users would be minimal due to the high limit proposed. Companies and services tailored to cater to institutions and business-to-business use cases would be affected.
A report by the Digital Chamber, a U.S.-based cryptocurrency advocacy organization, highlighted that 71% of Latam's institutions use stablecoins for cross-border payments, becoming the region with the highest adoption rate globally.
The rule would disincentivize the use of national crypto brokers for these purposes, given that most users tap the alternative stablecoin crypto system for its speed compared to traditional fiat payments.
Comment Period Closes July 2
Associations and other interested parties will have until July 2 to submit commentary and their views on the implementation of this rule.
FAQ
What did the Central Bank of Brazil propose for stablecoin transactions?
The Central Bank of Brazil proposed a 24-hour holding period for stablecoin transactions exceeding $10,000 in value. The measure applies to cross-border payments and remittances and allows virtual asset service providers to conduct risk analysis and due diligence procedures during the hold window.
When is the deadline to submit commentary on Brazil's stablecoin rule proposal?
Associations and other interested parties have until July 2 to submit commentary and their views on the implementation of this rule.
How does the proposed rule affect business-to-business stablecoin users?
Companies and services tailored to cater to institutions and business-to-business use cases would be affected by the 24-hour hold requirement. The impact on retail users would be minimal due to the $10,000 threshold, but the rule would disincentivize the use of national crypto brokers for cross-border payments given that most users choose stablecoins for their speed compared to traditional fiat payments.
