Juliana Maia Daniel

Berardo Advogados, São Paulo

juliana@berardo.adv.br

Andrei Gusev

Nordic Star, St Petersburg/Barcelona/Almaty

andrei.gusev@nordicstar.law

Introduction

The tightening of sanctions, increasing pressure on traditional payment systems and the concurrent advancement of digital financial technologies are reshaping the rules of the game for cross-border trade between Russia and Brazil. Since August 2023, Russia has been piloting the Digital Ruble, and since late 2024 it has been implementing pilot programmes for cross-border settlements using cryptocurrencies and digital assets. In Brazil, the first federal regulations on virtual assets have taken effect, while the Brazilian Central Bank (BCB) continues to introduce a phased regulatory framework and integrate cryptocurrencies into the formal financial system.

Where access to national currencies or conventional banking channels is limited, cryptocurrencies, stablecoins and Central Bank Digital Currencies (CBDCs) can offer viable settlement alternatives. Their appeal is driven by:

• Sanctions and financial fragmentation – growing reliance on sanctions as a foreign policy tool has pushed many countries in the Global South and sanctioned jurisdictions to seek alternatives to the dollar-centric SWIFT network.
• Speed and cost advantages – stablecoin settlements can be completed within minutes at a fraction of the fees charged by traditional correspondent banking.
• Emerging trade alliances – initiatives in BRICS, ASEAN and parts of Africa explicitly mention stablecoins and CBDCs as tools for de-dollarisation.
• Institutional entry – major financial institutions and payment providers are building regulated stablecoin infrastructure, such as PayPal USD, Circle’s USDC for international transfers and Tether’s expansion into commodity trade financing.

At the same time, compliance obligations are intensifying, with new and higher AML (anti-money laundering)/KYC (know your customer) standards, operational and technical requirements, sanction risk management and transaction history verification becoming essential for cross-border activity.

This article will:

• analyse key regulatory developments in Russia and Brazil;
• highlight relevant market scenarios and case studies;
• discuss sanctions-related risks and compliance requirements; and
• provide practical tools for compliance teams.

Legal regulation of digital assets: recent developments in Russia and Brazil

Russia: new opportunities for international settlements

The pilot programme for the Digital Ruble actually began on 15 August 2023 with 12 participating banks, and by mid-2024 it had processed over 100,000 transactions through about 2,500 wallets in more than 150 cities. September 2024 marked a turning point as amendments to the Federal Law On Digital Financial Assets (No 259-FZ) came into force. These amendments authorise the use of cryptocurrencies and stablecoins for cross-border settlements by legal entities under a pilot programme Federal Law No 221-FZ).

Key features:

• Only companies participating in pilot programmes are allowed to conduct cross-border crypto transactions (BTC, ETH, USDT, etc) in coordination with the Bank of Russia.
• Settlements must be processed through certified digital asset platform operators with mandatory disclosure of the transaction history and origin of funds.
• As of November 2024, separate regulations governing mining and digital mining platforms have come into effect, further legalising and structuring the sector.

IMPLEMENTATION IN PRACTICE

The first legal cross-border settlements using cryptocurrency were planned to be conducted between Russian and foreign companies under the supervision of the Bank of Russia by the end of 2024. Mass adoption of the Digital Ruble for corporate and retail payments is planned in stages, starting 1 September 2026 for large enterprises, with all merchants expected to join by 2028.

Brazil: gradual implementation of comprehensive regulation

Since June 2023, Federal Law No 14.478/2022 has provided the legal basis for regulating cryptoassets in Brazil. The BCB is implementing detailed licensing, AML/KYC and supervisory regimes for virtual asset service providers in phases (as announced in May 2024).

• The Regulatory Sandbox mechanism allows authorised entities to pilot innovative crypto services under controlled oversight.
• In April 2025, cryptoassets were formally listed as a strategic priority in the BCB Regulatory Agenda 2025–2026.
• Provisional rules remain in force during 2024, alongside the ongoing Drex platform pilot, which the Central Bank of Brazil clarifies is not a CBDC in the classic sense but a distributed-ledger-based infrastructure for tokenised bank deposits, loans and government securities – currently domestic in scope.

Key provisions:

• Registration with the BCB and compliance with AML/KYC and financial monitoring rules are mandatory for crypto-service providers.
• The sandbox allows time-limited experimentation within a regulated framework.
• Crypto regulation is integrated into the BCB’s multi-year strategic priorities.

TRANSITION PERIOD

In 2024, provisional and emerging regulations coexist, with Drex pilots involving major financial institutions as part of Brazil’s evolving digital monetary infrastructure. Stablecoins already account for around 90 per cent of Brazil’s crypto transaction volume, according to the Central Bank, and in 2025 regulators plan to introduce specific rules for stablecoins and asset tokenisation.

As part of Brazil’s broader push to regulate digital assets, the Brazilian Securities and Exchange Commission (CVM) is expected to launch a public consultation on tokenisation frameworks by the end of September 2025. This initiative will complement the Central Bank’s ongoing regulation of virtual asset service providers and Drex pilots. A unified, comprehensive approach to crypto regulation (spanning payments, asset representation and compliance) will be critical for enabling secure, transparent and scalable cross-border crypto operations, especially for companies engaged in BRICS-aligned trade strategies.

Use cases and market scenarios

Settlement scenarios:

1. Stablecoin-based export/import: eg, USDT or USDC via international exchanges and multi-currency wallets. A notable Brazilian example is a Banco Bradesco pilot settling commodity transactions in stablecoins for faster, lower-cost settlement.
2. Licensed platform settlements: transactions processed through licensed operators in both countries, with full KYC for all parties.
3. CBDC-based transactions: although pilots for the Digital Ruble began in 2023 and Drex remains in domestic testing, there is still no confirmed Digital Ruble-Drex cross-settlement. Both countries are active in BRICS discussions on CBDC interoperability and blockchain-based trade mechanisms.

Real-world examples from 2024:

1. A Russian metallurgical company purchased Brazilian raw material processing equipment. The USDT payment was processed through a Singapore-based exchange, with both parties fully verified under Russian and Brazilian standards. The transaction was completed in six hours, with fees under 0.5 per cent (compared to three to five days for a similar SWIFT transaction).
2. A Brazilian exporter received payment in Digital Rubles[1] via a CBDC platform[2]. The transaction was executed in two hours with full disclosure of beneficiaries. Both parties provided supporting documentation for the source of funds and economic rationale of the transaction.
3. The ‘transparent blockchain’ system, co-developed by the Bank of Russia and VTB, is set for launch in late 2025 to monitor crypto flows and detect illicit activity.

Sanctions-related risks: how to minimise exposure

Secondary sanctions and blocking practices

Since early 2024, major international crypto exchanges such as Binance, OKX and Bitstamp have increased compliance controls with US, EU and UK sanctions, leading to account restrictions or freezes for users suspected of dealing with sanctioned individuals, entities or jurisdictions. Between April and June 2024, numerous Russian companies reported incidents where accounts were frozen following transactions with entities in ‘unfriendly’ jurisdictions. While Brazilian entities are not broadly sanctioned, they could be indirectly affected if involved in such transactions.

Risks to companies

Companies engaging in cross-border cryptocurrency transactions face potential risks, including automatic freezing of assets, disrupted deliveries, inability to fulfill contractual obligations, reputational harm and exposure to secondary sanctions from OFAC or EU authorities, even if not directly targeted.

Recommendations to minimise risk

To reduce these risks, companies should:

• operate through exchanges and platforms not directly tied to sanction-enforcing jurisdictions, preferably in neutral regions but with strong compliance;
• conduct multi-level counterparty verification, avoiding anonymous wallets;
• use blockchain analytics tools (Chainalysis, Crystal) to verify transaction histories;
• maintain contingency settlement channels (domestic systems, alternative arrangements);
• ensure platforms are licensed in their jurisdiction;
• obtain complete KYC documentation from counterparties;
• verify the economic rationale and lawful origin of funds;
• keep a full audit trail (communications, transaction hashes, screenshots);
• prepare alternative payment routes in case of blockages;
• integrate crypto platforms with ERP/banking systems in compliance with security/reporting rules; and
• regularly update AML/KYC policies to reflect law and sanctions list changes.

Outlook for 2025/2026: what to expect

Based on current regulatory agendas and policy announcements, both Russia and Brazil are advancing pilot initiatives for cross-border cryptocurrency settlements, with Russia’s Digital Ruble framework already operating since August 2023 and moving towards phased mass adoption starting in September 2026, and Brazil moving through phased regulation.

While no bilateral programme is yet confirmed, these developments could pave the way for the introduction of commercial banking services tailored to corporate digital asset transactions. Within the BRICS framework, discussions are underway on developing interoperable APIs to link the Digital Ruble and Brazil’s Drex platform (DLT-based infrastructure for tokenised deposits and assets, not a classic CBDC), though technical implementation remains at a conceptual stage. Regulators in both countries have signalled their intention to publish new compliance guidelines and technical standards to address cryptocurrency, stablecoin and CBDC integration, with Brazil’s Central Bank explicitly listing virtual assets as a strategic priority for 2025–2026 and confirming plans to regulate stablecoins and asset tokenisation in 2025.

At the same time, global scrutiny, particularly regarding secondary sanctions, is expected to intensify, reinforcing the need for flexible, well-structured and thoroughly documented compliance procedures.