The International Monetary Fund (IMF) has called for stricter oversight of Brazil’s stablecoin market, citing the rapid expansion of cross-border crypto transactions that now outpace traditional capital movements. In its latest Financial System Stability Assessment, the IMF highlighted that the country’s crypto ecosystem is increasingly intertwined with the traditional financial system, while gaps remain in stablecoin regulation, customer asset protection, and anti-money laundering compliance.
The fund’s analysis found that purchases of dollar-backed stablecoins are two to three times more sensitive to global financial shocks than conventional portfolio investment or foreign direct investment. This heightened sensitivity raises concerns about how quickly international volatility could spread through crypto markets, particularly as stablecoins account for an estimated 90% of Brazil’s reported crypto flows, according to previous comments by Banco Central do Brasil (BCB) Governor Gabriel Galípolo.
While the IMF did not call for outright restrictions on stablecoins, it recommended strengthening the regulatory framework as crypto assets become more integrated with payment and financial infrastructure. The report acknowledged BCB’s recent measures, including Resolution BCB No. 561, which bars the use of virtual assets to settle transactions through regulated electronic foreign exchange channels. However, the IMF stressed that further rules are needed for stablecoin issuance, consumer safeguards, and compliance with AML and counter-terrorist financing standards.
The assessment arrives as Brazil’s stablecoin market continues to grow alongside innovations like the integration of Pix with Tether-based payments, demonstrating how dollar-backed stablecoins coexist with the country’s domestic instant payment system. With cross-border crypto flows expanding faster than traditional capital, the IMF’s recommendations aim to preempt potential financial stability risks while preserving the benefits of digital asset adoption.
