Brazil advances legislation to prohibit algorithmic stablecoins with approval of Bill 4,308/2024

Brazil’s congressional committee has passed Bill 4,308/2024, targeting algorithmic stablecoins and requiring that all stablecoins be fully backed by separated reserves.

The bill sets criminal penalties of up to eight years for issuing unbacked stablecoins, such as Ethena’s USDe and Frax, while enforcing compliance obligations for exchanges offering stablecoins like USDT and USDC.