TechFlow News, February 5: According to CoinDesk, Brazil’s Congressional Committee on Science, Technology, and Innovation has approved Bill No. 4,308/2024, which bans the issuance or trading of algorithmic stablecoins such as Ethena’s USDe and Frax.
The new bill requires all stablecoins issued in Brazil to be fully backed by reserve assets. Issuing uncollateralized stablecoins would constitute financial fraud, punishable by up to eight years’ imprisonment. For foreign-issued stablecoins such as USDT and USDC, only companies authorized to operate in Brazil may provide them, and exchanges must ensure that the foreign issuers comply with Brazilian regulatory standards.
According to data from Brazil’s tax authority, stablecoins currently account for 90% of the country’s cryptocurrency trading volume. The bill still requires approval by several additional committees and review by the Senate before it can become law.
