The Central Bank of Brazil plans to restrict users from withdrawing stablecoins from CEX to personal Wallet, accelerating the devaluation of USDT in the local Fiat Currency?

Brazil's Central Bank (BCB) issued a public consultation notice on a cryptocurrency regulatory proposal last month, in which Brazil's Central Bank plans to ban centralized exchange (CEX) from allowing users to mention Stable Coin in self-custody Wallet, and Brazil's Central Bank will eventually be able to implement the proposal without adopting public comments. (Synopsis: Brazilian lawmakers propose to include "BTC in national reserves": it is proposed to invest $17.7 billion to stock up on BTC) (Background supplement: Rush! First "SolanaSpot ETF" approved by Brazil's Securities and Exchange Commission, SOL jumped) Brazil's Central Bank (BCB) released a cryptocurrency regulation proposal last week and launched a public consultation. In the proposal, Brazil's Central Bank plans to restrict centralized exchange (CEX) open users from mentioning Stable Coin to self-hosted Wallet. According to the public consultation notice, the transfer of Stable Coin (tokens denominated in foreign coins) between residents will be restricted if Brazilian law already allows payments in foreign coins. Brazil Central Bank's proposed regulatory framework also outlines three core activities for virtual asset service providers in the Forex market, including: Facilitating international payments and transfers through cryptocurrency Provides non-Brazilian residents with token exchange and custody services denominated in the Brazilian Fiat Currency Real The management of token transactions linked to foreign coins is mainly to provide legal certainty for businesses and individuals. At the same time, Brazil also regulates encryption investments, saying that encryption investments will be subject to the same regulatory standards as traditional financial investments. Brazilian Fiat Currency Real Falls to Record Low However, it is worth noting that Brazil's Central Bank proposal comes at a time when Brazil's Fiat Currency Real fell to a record low on November 29, when 6 reais was only 1 US dollar, the lowest level since the real began circulation in 1994, indicating that the market continues to be uneasy about Brazil's fiscal discipline. In order to stabilize the local Fiat currency, in addition to the new bill, the Brazilian government has also tried to calm market sentiment with a number of policies, including: cutting public spending by about $12 billion from 2025 to 2026; Tax cuts for middle-income nationals and tax increases for the rich. Brazil's Stable Coin market is active The author speculates that local residents may prefer the US dollar because of the strong local Fiat Currency Fluctuation, and Stable Coin provides a new exchange channel, which in turn has become a major factor driving the real selling pressure. Therefore, the local government hopes to regulate Stable Coin more clearly through the new law, and at the same time promote real-denominated cryptocurrency transactions. According to statistics released by the Brazilian Tax Authority (RFB) in November, in September 2023, about 4.4 million Brazilians used cryptocurrency to transfer $4.2 billion. Among them, Stable Coin transfers accounted for 71.4% of the share, about $3 billion, and mainly Tether's Stable Coin USDT. Brazil Central Bank may not adopt public comments to implement the proposal However, it is worth noting that although Brazil Central Bank has issued a consultation notice to the public, until the end of February 28, 2025, the public can submit comments to it, but Brazil Central Bank can also completely ignore public comments and directly regulate in accordance with the provisions stated in the document. Extended reading: USDT dominates 80% of Brazil's cryptocurrency volume; Chainalysis: Stable Coin is escaping US regulation Related Stories Get 100 million customers to use the BTC Lightning Network! Brazil's largest online bank, Nubank: Significantly boosting the adoption of cryptocurrency in Latin America BlackRock enters Brazil's issuanceBTCSpotETF "IBIT BDR"! Net traffic accounts for 42% of the company's ETF USDT accounts for 80% of Brazil's cryptocurrency volume; Chainalysis: Stable Coin is fleeing U.S. regulation (Brazil's Central Bank plans to "restrict users from withdrawing Stable Coin from CEX to personal wallet", USDT accelerates the depreciation of local Fiat currency? This article was first published in BlockTempo "Dynamic Trend - The Most Influential Block Chain News Media".