Brazilian courts have been permitted to freeze owners’ crypto balances if those owners fall into arrears on debt repayment. Brazil’s Superior Court of Justice (STJ) has unanimously decided that judges may now notify crypto exchanges of their intent to seize a debtor’s crypto assets to repay outstanding debts, local media has reported. The decision, from the court’s Third Panel, examined a case brought by a creditor trying to get repayment. “Although they are not legal tender, crypto assets can be used as a form of payment and as a store of value,” the STJ wrote in a translated statement published on its website, confirming the decision. Crypto now treated like bank accounts in legal disputes Under Brazilian law, judges are empowered to freeze bank accounts and authorize fund withdrawals without notifying the debtor. Following the new ruling, crypto assets will now be treated similarly and may be frozen or confiscated to satisfy legal obligations. Minister Ricardo Villas Bôas Cueva, one of the five-panel members, acknowledged that while Brazil still lacks comprehensive regulation for cryptocurrencies, several legislative proposals already define them as a “digital representation of value.” Despite the regulatory gap, Brazil has emerged as one of the leading countries in Latin America for crypto adoption. An October report from Chainalysis ranked Brazil second in the region based on the volume of crypto value received, highlighting the nation’s growing engagement with digital assets. In a notable move earlier this year, Binance received regulatory approval to operate in Brazil after acquiring a São Paulo-based investment firm. At the time, a Binance executive told Cointelegraph that Brazil was making “significant strides” toward crypto regulation and predicted that a comprehensive legal framework would be introduced “by mid-year.” Stablecoin ban sparks debate in growing market Still, not all developments have been favorable to the industry. In December, Brazil’s central bank proposed a controversial ban on stablecoin transactions via self-custodial wallets—an increasingly popular method for Brazilians to protect their wealth against real devaluation. Critics argued that such a ban would be hard to enforce. “Governments can regulate centralized exchanges, but P2P transactions and decentralized platforms are much harder to control,” said Trezor analyst Lucien Bourdon. “That means the ban would likely only affect part of the ecosystem.” Brazil’s largest bank, Itaú Unibanco, is presently considering the launch of its own stablecoin, making it the latest major traditional financial institution to announce these plans. Local media reported that the bank’s decision will depend on how Brazil’s regulatory framework evolves and how similar initiatives by major international institutions perform. The move follows a wave of recent announcements by TradFi institutions regarding plans to launch or develop stablecoins. Bank of America signals readiness for stablecoin launch In the U.S., Bank of America CEO Brian Moynihan recently confirmed that the bank is prepared to launch a dollar-backed stablecoin if Congress establishes a clear legal framework. The announcement places the U.S. lender among a growing number of systemically important banks planning entry into the stablecoin sector. These developments have come in the wake of US President Donald Trump’s formal rejection of a central bank digital currency (CBDC) and endorsements for stablecoins, which has shifted attention away from state-issued digital money and toward private-sector alternatives. As Brazil continues its regulatory evolution, the court’s latest ruling reinforces the perception of crypto assets as integral to the country’s financial system—even as broader legal frameworks are still in development. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot
