The growing use of US dollar-backed stablecoins for cross-border payments is adding volatility to Brazil’s capital flows, according to Central Bank Deputy Governor, Renato Gomes, Reuters reported.
Speaking at a conference hosted by OMFIF in London on May 20, Gomes said these digital assets allow users to bypass traditional currency conversion processes.
Brazil’s Central Bank estimates that around 90% of domestic crypto flows are tied to stablecoins, whose usage has expanded significantly over the past few years.
“They offer a bypass instance,” Gomes said. “You can get the stablecoins, and when you get to the United States or anywhere else, you can cash out the stablecoin and essentially use an account in dollars without all the usual regulation.”
He added that stablecoins are being “heavily used” for remittances, noting that some ATMs in the United States now enable withdrawals directly from stablecoin wallets.
“Capital flows become more volatile,” he said, “essentially because almost anyone can use stablecoins to send money in and out of the country.”
Gomes also raised concerns about oversight, pointing out that the largest issuer of real-backed stablecoins is based in Switzerland. “We don't have reach on these issuers,” he said, calling for stronger international regulatory cooperation.
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