- Coinbase criticizes Brazil’s proposed stablecoin regulations limiting withdrawals
- Tom Duff Gordon emphasizes stablecoins’ importance for decentralized finance development.
- The company offers alternative regulatory approaches addressing money laundering concerns.
Cryptocurrency exchange Coinbase has voiced strong criticism of Brazil’s Central Bank’s proposed stablecoin regulations. In an interview, Tom Duff Gordon, Coinbase’s vice president of international policies, specifically challenged restrictions that prohibited withdrawing stablecoins to self-custody digital wallets.
The contested regulation, shared in the Central Bank’s public consultation no. 111, would block transfers of stablecoins to wallets directly controlled by users. Brazilian authorities have cited concerns about tax evasion and money laundering as justification for these restrictions.
“I think the Central Bank could reconsider this issue. Stablecoins will be fundamental to the development of the internet of the future and decentralized finance, and self-custodied wallets play an essential role in this ecosystem,” Gordon stated. The executive emphasized that while he understands the Central Bank’s regulatory concerns, alternative approaches could satisfy both regulatory requirements and innovation needs.
Coinbase has formally responded to the public consultation with specific proposals that would address the regulator’s concerns while preserving user autonomy. “In our response to the Central Bank’s public consultation, we presented arguments on how this model can be implemented safely, addressing legitimate concerns about AML (anti-money laundering) and KYC (know your customer) practices.
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The proposed regulation comes as Brazilian authorities have increasingly focused on the growing stablecoin market, particularly its use for cross-border payments and remittances. Last year, officials proposed taxing these activities as part of efforts to regulate the cryptocurrency sector. The self-custody wallet restriction is an attempt to maintain visibility into financial flows that might otherwise be difficult to track.
Coinbase’s advocacy in Brazil mirrors its global regulatory engagement strategy. In February, the exchange sent a letter to the U.S. Federal Reserve and other banking regulators requesting permission for banks to offer cryptocurrency custody and trading services. As Brazil continues developing its cryptocurrency regulatory framework, the outcome of this debate over stablecoin transfers to self-custody wallets could impact the country’s position in the global digital asset ecosystem.
