Brazil could be the next battleground for a stablecoin debate following recent comments by the country’s central bank
Coinbase, Visa, Binance and Tether have opposed Brazil’s proposal to classify stablecoins as electronic money.
The companies, all members of the Brazilian Association of Cryptoeconomics (Abcripto), were responding to comments made last week during a hearing of Congress’ Economic Development Committee.
Fábio Araújo, a consultant in the Central Bank of Brazil‘s Department of Financial System Regulation, said stablecoins should be viewed as “real-world assets” and be treated as a form of monetary instrument.
The proposal would mean that stablecoins aren’t regulated in the same way as cryptocurrencies like Bitcoin and Ethereum because they are mostly used for payments and value transfer.
Classifying stablecoins as electronic money would place them within a payments-focused regulatory framework, bringing them closer to traditional digital money products.
The comments have attracted significant attention because Brazil’s Congress is preparing to consider Bill 4308/2024, which aims to establish a clearer legal framework for stablecoins.
Why Coinbase and co say no
Coinbase has built a reputation in recent months for challenging lawmakers over digital asset regulation. In February, CEO Brian Armstrong warned the UK risked damaging its competitiveness after the Bank of England proposed a cap on stablecoin holdings for individuals and businesses.
The company’s opposition, as well as other industry voices, appeared to have an impact. By June 2026, the Bank of England had dropped the retail holding cap and instead introduced a £40bn issuance guardrail.
Armstrong has also been among the strongest critics of parts of the Clarity Act, arguing proposals preventing stablecoin issuers from earning interest on the reserves backing their tokens would impose bank-like obligations without allowing firms to generate bank-like returns.
Coinbase, Visa, Binance, Tether, Ripple, OKX and other members of Abcripto believe that classifying stablecoins as electronic money would apply payment rules to an asset that also functions as digital infrastructure for trading, cross-border transfers and decentralised finance.
The industry argues that using this classification would negatively impact stablecoin adoption in Brazil, with the country already behind other South American nations such as Argentina and Colombia.
According to the association, a more fitting classification would be to create a regulatory framework specifically for stablecoins.
Brazil won’t back down easily
Last week, the Central Bank of Brazil revealed that purchases of digital assets and stablecoins rose 155% year-on-year to May 2026, with Brazilians buying $12.13bn worth of the assets over the period.
However, while the bank has acknowledged the demand, it has also taken a firm approach to regulation.
Earlier this year, it prohibited the use of cryptoassets to settle cross-border payments by electronic foreign exchange providers, requiring transactions to pass through traditional foreign exchange channels instead.
This decision formed part of a larger overhaul of Brazil’s international payments framework, which aimed to increase oversight and protect monetary sovereignty. The rules will come into force on 1 October 2026. Providers must register their eFX activities with the central bank by 30 October 2026.
Trading, holding and spending stablecoins are still legal in Brazil, but regulators have shown they want the assets to operate within a tightly supervised framework.
