Governor of the Central Bank of Brazil: The rapid growth of stablecoins is related to tax evasion and money laundering, and may prohibit individuals from holding them

According to Bitcoin.com, the newly appointed governor of the Central Bank of Brazil, Gabriel Galipolo, stated that over 90% of cryptocurrency usage in the country is for stablecoin transactions. The central bank's analysis found that stablecoins are mainly used for cross-border payments and pose risks of tax evasion and money laundering. Galipolo pointed out that the central bank initially thought the popularity of stablecoins was due to their providing a convenient way for people to hold US dollars. However, after further research, it was discovered that a large number of stablecoin transactions are related to cross-border shopping and these transactions lack transparency which could be used for tax evasion or money laundering activities. He also criticized some citizens' pursuit of privacy as it often relates to illegal activities.

Galipolo revealed that last December, the Central Bank proposed new regulations linking stablecoin regulation with foreign currency or potentially banning individuals from holding stablecoins. If this regulation is ultimately passed, it will limit Brazilian users' participation in decentralized finance (DeFi) activities because most DeFi platforms require users to manage their own funds.