The Central Bank of Brazil faces mounting criticism over a proposed ban preventing users from withdrawing stablecoins into self-custody wallets. Several major crypto exchanges have warned that the move could drive them out of the country, creating tension between the regulatory body and the digital asset industry.
Exchanges like Binance and similar platforms are concerned about the strictness of this measure. Some argue that a system could be introduced instead of outright banning to monitor transactions and guarantee that users still have their rights.
Binance’s legal head for Brazil and El Salvador, Thiago Sarandy, pointed out that blockchain’s transparency allows effective monitoring. He suggested that the central bank use blockchain analysis firms to follow the flow of funds.
According to Sarandy, this approach would help tackle tax evasion and money laundering without influencing the right to hold crypto independently. He said that instead of banning digital assets, they could be required to report everything accurately.
Also Read: Hong Kong Syndicate Used Crypto to Launder Millions, Police Say
Exchanges Warn Policy Could Trigger Market Exit
Legal experts are also voicing alarm over the proposed restriction’s constitutional implications. Cesar Carvalho, a partner at Baptista Luz Advogados, warned that the ban could violate property rights, a principle protected by the Brazilian Constitution.
He pointed out that the proposal fails to consider proportion and could lead to something worrisome. Legal teams constantly highlight to the central bank the risks such regulation brings to democracy and the law.
Likewise, Guilherme Sacamone, the leader of OKEx Brazil, reported that the ban might drive reputable brokers out of the country. According to him, reputable businesses suffer more than criminals from this law.
Gabriel Galipolo, President of the Central Bank, has linked cryptos to money laundering and tax cheating. His statement clearly states that the idea is to strengthen financial rules, yet this has led to criticism from the industry.
Crypto exchanges are objecting to Brazil’s regulations, which they view as too strict. If the central bank insists on doing things its way, the country may lose vital businesses in the thriving digital sector.
Also Read: UK to Force Crypto Platforms to Report User Data or Face Huge Fines by 2026
