IMF Says Brazil’s Crypto Cross-Border Flows Have Overtaken Traditional Capital Movements

Crypto-based cross-border flows in Brazil have surpassed traditional capital movements, reflecting the rapid adoption of stablecoins by companies and individuals sending money abroad.

Crypto news outlet Odaily reported on July 28 that the International Monetary Fund, in a Brazil financial system stability assessment released this month, said the country’s crypto-based cross-border flows have risen steadily since 2017.

The IMF said most of those flows were driven by stablecoins. It said companies and individual investors were using stablecoins for transaction efficiency and tax-related reasons.

The report found that stablecoin flows were affected not only by the S&P 500 Index, the Cboe Volatility Index and Bitcoin prices, but also by exchange rates, interest rates, policy uncertainty and changes in taxation.

The IMF also said Brazil’s central bank has begun regulating virtual asset service providers, or VASPs, but customer legal protections and the segregation of custodial assets remain inadequate. It said Brazil also needs to fully implement international anti-money laundering and counter-terrorism financing standards, including the Travel Rule, which requires sharing information on parties to a transaction.