Brazil's Congress Science and Technology Innovation Committee has passed a bill to ban the issuance and trading of algorithmic stablecoins, such as USDe by Ethena and Frax. The legislation mandates that all stablecoins in Brazil must be fully backed by reserve assets. Violations, including issuing uncollateralized stablecoins, will be treated as financial fraud, carrying a maximum penalty of 8 years in prison. The bill also stipulates that foreign stablecoins like USDT and USDC can only be offered by companies authorized to operate in Brazil. Trading platforms must ensure compliance with Brazilian regulations for these foreign issuers. Currently, stablecoins represent 90% of Brazil's cryptocurrency trading volume. The bill requires further approval from additional committees and the Senate before becoming law.