On December 26, 2024, the Banco Central do Brasil proposed a ban on stablecoin transactions to self-custodial wallets, such as MetaMask and Trezor. This decision comes as the use of stablecoins, particularly Tether's USDt, has surged in Brazil, driven by citizens seeking to hedge against a declining Brazilian real.
The central bank's public consultations on this proposal are set to conclude in February 2025, with industry experts predicting the ban could be implemented by 2025. Carol Souza, co-founder of Area Bitcoin, indicated that the move aims to restrict stablecoin transactions outside Brazilian trading platforms, despite the challenges of enforcing such a ban on decentralized platforms.
Lucien Bourdon, a Bitcoin analyst at Trezor, suggested that while centralized exchanges can be regulated, peer-to-peer transactions are harder to control, which may lead users to shift toward decentralized solutions. This pattern has been observed in other countries, such as Nigeria and China, where restrictions have driven users to decentralized platforms.
Tether CEO Paolo Ardoino emphasized the importance of collaboration with Brazilian authorities to ensure consumer protection while fostering innovation in the digital asset space.