The US and Brazil's issuance and withdrawal of stablecoins

Author: Charlie Liu, Partner, Generative Ventures

The two most noteworthy stablecoin news items these past few days happen to come from two very different countries.

On one side is the United States. The Senate, after months of delays, finally made progress on the crucial issue of stablecoin rewards.

On the other side is Brazil. On April 30th, the central bank issued Resolução BCB nº 561, updating the eFX rules and explicitly removing virtual assets from the settlement position in regulated cross-border payment chains.

On the surface, one is clarifying, the other is banning; one seems to be opening up, the other seems to be tightening. But I think the real point of interest isn't this superficial contrast, but rather looking at these two actions from a different perspective. This time, the US isn't opening loopholes for stablecoin yield, and Brazil isn't opposing crypto. What both sides are really doing is specifying more concretely than before where stablecoins can and cannot be touched. It's just that, as the core country of the dollar system, the US's priority now is protecting bank deposits and account relationships. As the largest economy in Latin America and one of the core payment markets in the Global South, Brazil's priority now is to safeguard cross-border payments, capital flows, and its de facto entry point into the US dollar. Therefore, the real question this article aims to answer is not which country is more open or which is more conservative. Today, the debate among nations is no longer about whether or not to adopt stablecoins, but rather where stablecoins will penetrate their domestic financial systems. For the United States, the competition is about whether stablecoins can become payment infrastructure rather than a substitute for banks. For Brazil, the key issue is whether it can improve cross-border efficiency without becoming a de facto dollarization channel. The real addition from the US this time isn't a new direction, but rather a step towards making the border more lawful. The recent trend in the US is to "ban bank-like passive yield while retaining activity-based rewards," a direction the market has largely known over the past few weeks. The Senate version in January already stated that interest should not be paid simply for users holding stablecoin, but rewards could be given for certain behaviors. When the White House mediated in February, the focus of discussion was already on "rewarding payments and transfers, but not rewarding idle holdings." The fact that negotiations stalled again in March precisely illustrates that the dispute was no longer about principles, but rather about where the line should be drawn. What has truly changed in the past few days is that this issue has finally moved from a vague direction into a compromise closer to what the Senate could realistically implement, and this compromise is even tighter than many crypto enthusiasts had originally hoped for. Coinbase's head of policy, Faryar Shirzad, made an interesting statement: banks ultimately received more restrictions on rewards, but crypto retained the ability for Americans to earn rewards based on genuine use of crypto platforms and networks. This wording itself speaks volumes. It's not that stablecoin rewards have been loosened, but rather that, although within a narrower framework, a small but crucial space for their survival has been preserved. I think the most noteworthy new information isn't the phrase "activity-based rewards," but rather the changing criteria behind it. This round of compromise goes beyond simply prohibiting "paying interest on simple holdings"; it goes further, restricting designs that are economically or functionally equivalent to bank interest-bearing deposits. In other words, regulators are no longer just looking at whether it's formally called interest, APY, or bonus, but rather whether it economically resembles a disguised deposit product. You can package it as loyalty, cashback, or platform incentives, but if it's essentially financializing idle balances, it will ultimately cross the line with banks. This is the real direction of clarification from the US this time. It's not answering whether stablecoins are qualified to exist, but rather which function stablecoins are first allowed to fulfill. Payments, transfers, settlements, platform usage, and online participation—these activity-based scenarios still have room for development; however, the path of monetizing balances, making them like deposits, and providing a positive alternative to bank liabilities has been further blocked. In other words, the US is now willing to accept stablecoins as payment infrastructure; it is unwilling to accept stablecoins as shadow checking accounts or savings accounts. There is another easily overlooked but, in my opinion, more important point: this compromise did not attempt to completely define permissible rewards in the congressional text, but rather left some specific boundaries for further refinement by subsequent regulators. For crypto companies, this is certainly not a complete victory; but for the design of the US system, it is quite typical. Congress first acknowledges that stablecoins can have a limited space in payment and usage scenarios, and then leaves the real perimeter to regulators to gradually define through disclosure, review, and subsequent rules. What the US is opening up this time is not the potential returns, but the institutional space for stablecoins as payment assets; what it is truly unwilling to relinquish is the step of stablecoins becoming a substitute for bank deposits. To put it more bluntly, the US is not now asking "Do we want stablecoins?" This political question has long been over. The real question now is: "Where will stablecoin sit first?" Will it sit at the payments and settlement table, or at the deposits and savings table? The answer in recent days has become increasingly clear: the former is acceptable, the latter not. What Brazil has truly banned this time is not innovation, but the layer where stablecoin touches upon monetary sovereignty. To view Brazil's actions as "yet another emerging market central bank cracking down on crypto" would be far too simplistic. Brazil has actually been quite proactive in payment innovation over the past few years, and its regulators are arguably among the most aggressive and capable in terms of institutional design globally. The issue has never been whether or not to introduce new payment methods, but rather who defines the new trajectory and who controls the entry point. The best historical examples are WhatsApp Pay and PIX. In June 2020, WhatsApp launched in-message payments in Brazil, only to have them suspended by the central bank a few days later. The regulators' reason wasn't "we oppose digital payments," but rather the potential for compromised competition, efficiency, and data privacy. In November of the same year, the Central Bank of Brazil launched Pix, publicly stating that society needs a fast, cheap, safe, transparent, and open payment system. By 2023, the Central Bank of Brazil had approved WhatsApp's small business payment function for merchants, built on the previously approved P2P platform. Looking at these three steps together, Brazil's regulatory logic becomes clear: innovation can enter, but it cannot seize the payment gateway outside the regulatory perimeter; the system can be updated, but control of the system cannot be lost first. Applying this logic to stablecoin makes things even clearer. In November 2025, the Central Bank of Brazil already included the buying and selling of virtual assets pegged to fiat currency, as well as the use of virtual assets for international payments and transfers, within its foreign exchange management framework. With Resolução BCB nº 561, the rules have been further tightened: within the regulated cross-border payment channel eFX, payments or receipts must be completed through traditional foreign exchange operations or through a non-resident real account held in Brazil; virtual assets cannot be used as a settlement tool in this chain. In other words, Brazil isn't restricting the currency itself, but rather the entire system; not whether users can hold stablecoin, but whether stablecoin can serve as infrastructure within the regulated cross-border rail network. I think the most crucial point here isn't the ban itself, but rather what it reveals Brazil's deepest fears. The Central Bank of Brazil has been quite frank about its true anxieties over the past year. Gabriel Galipolo stated in February that approximately 90% of Brazil's crypto traffic is related to stablecoins, primarily for payment purposes. Vice Governor Renato Gomes was even more direct last May, saying that stablecoins are becoming tools to circumvent usual checks and balances, allowing people to exchange reals for dollars and transfer them across borders. Once abroad, it's essentially like using a dollar account outside of usual regulations. This expression practically screams the answer: Brazil isn't really wary of speculative crypto, but rather of stablecoins as a de facto channel for dollarization and a gateway for cross-border accounts. Therefore, I wouldn't describe Brazil as "conservative" this time. On the contrary, I think they are very clear-headed. Because they realized earlier than many markets that the most dangerous aspect of stablecoins isn't necessarily on the investment or speculation side, but rather that they could gradually grow into another parallel gateway for the US dollar in everyday use cases such as payments, remittances, cross-border shopping, and remote labor settlements. For a country whose currency is not a global reserve currency, yet which pays close attention to capital flows and foreign exchange regulation, this is certainly not a technical issue, but rather a matter of monetary sovereignty. The difference between developed countries and the Global South lies not in openness or conservatism, but in which gate they choose to guard. The truly interesting point is here when you compare the US and Brazil. The US is a developed country, the center of the dollar system, and the place where the market first amplified the global stablecoin policy. Its banking system is deep, its deposits are large, and the US dollar is the global settlement currency. Therefore, its biggest concern is not whether stablecoin will help internationalize the dollar—which, in a sense, may not be a bad thing—but whether stablecoin will move the account relationships and liabilities that originally belonged to banks. The reason banks were so tough in the US negotiations was not because they didn't understand innovation, but because they clearly understood that what was truly being eroded was not transaction fees, but the very foundation of deposits. Brazil is completely different. It's not that it lacks payment innovation; on the contrary, it has Pix, a global instant payment infrastructure being researched. It's not that it's unaware of the uses of stablecoin; on the contrary, it has already incorporated such activities into the regulatory framework. However, since it is not the issuer of the global reserve currency, the boundaries between its currency and the US dollar, the visibility of cross-border capital flows, and the enforcement of foreign exchange rules will be more sensitive. Therefore, the biggest impact of stablecoins on Brazil is not "whether it will replace bank savings accounts," but "whether it will quietly become an extra-institutional interface for the US dollar." The US safeguards the liability side of banks, while Brazil safeguards its monetary sovereignty and cross-border valves. On the surface, one is clear and the other is prohibited; at the core, both are guarding the door in their domestic financial systems that they least want to be rewritten. This is why I increasingly dislike viewing global stablecoin policy as a binary narrative of "developed countries being more open and developing countries being more conservative." What truly determines regulatory action is its position within the global monetary and financial system, its core control points, and where stablecoins are most likely to infiltrate. For the US, the entry point is primarily payments, then deposits; for Brazil, the entry point is primarily remittances and FX, then others. The stablecoin war has shifted its battlefield: from "who can issue a coin" to "who can control the entry point." Having written this far, I think the real judgment this article aims to make is clear. Today, the competition in stablecoins is increasingly not as simple as "who can issue a compliant coin." Licenses, reserves, audits, and custody are certainly important, but they are slowly becoming table stakes, not the deciding factors. What truly begins to differentiate winners are four other things: who can control the distribution channels, who can continuously deliver value to users, who can avoid being identified by regulators as a bank alternative, and who can secure new interfaces in cross-border payments and dollar flows. The US's clarification this time illuminates the third point; Brazil's ban this time illuminates the fourth. Therefore, in my view of the next phase of the stablecoin war, I don't think the main battleground will be "who issues another, larger stablecoin." The real battleground will unfold at entry points such as the wallet layer, merchant acquiring, platform loyalty, cross-border settlement, creator payouts, and remittance UX. The US's compromise this time has already charted the course: you may no longer be able to rely on the most brute-force holding rewards to attract new users, but you can design more complex and long-term value distribution mechanisms around payments, transfers, consumption, and online participation. Brazil, on the other hand, is reminding everyone: not every country is willing to allow you to extend this value distribution all the way to cross-border and dollar entry points. The US's answer is that stablecoins can become payment infrastructure, but shouldn't be too much like deposit accounts. Brazil's answer is that stablecoins can exist as regulated assets, but they shouldn't become de facto channels for dollarization. Neither side is answering "whether or not to have stablecoins," but rather "where stablecoins can operate." This isn't a minor amendment to a bill, nor a ban from some emerging market. This signals that the stablecoin competition is shifting from "who can issue them" to "who can continuously distribute value to users, who can control access to dollar accounts, and who can control cross-border channels." The real decision countries need to make next is not whether or not to adopt stablecoins, but whether or not they are willing to allow stablecoins to touch the most sensitive layer of their financial systems. For developed countries, that layer is still about bank deposits and account relationships; for developing countries, it involves cross-border payments, capital flows, and monetary sovereignty. This issue is not only far from over, but has only just begun.