A non-deliverable currency is one that offshore markets trade through contracts settled in US dollars, never delivered in the currency itself. In 2016 the BIS described this market for the Brazilian real (BRL) and the Colombian peso (COP), citing limits on home-market trading and offshore delivery. Paying in either takes an onshore conversion and a local rail.
A forward does not pay a supplier, and this post shows why with the figures the Bank for International Settlements (BIS) published for April 2025. The usual alternative, a dollar wire, lets each correspondent bank add days and take a fee on the way. The full route a payment takes is in what a stablecoin corridor is.
Why offshore markets trade the real and the peso without delivering them
The instrument behind the term is the non-deliverable forward (NDF). The BIS describes it as a contract for the difference between an agreed rate and the spot rate at maturity, settled with a single payment for one counterparty's profit. It lets a trader hedge or speculate in a currency "without providing or requiring funding in it". It exists because investors use it to circumvent "limits on home market ('onshore') trading and on delivery of the home currency offshore" (BIS Quarterly Review, December 2016).
The same article says the NDF is "a key instrument in EME currencies' offshore, but not onshore, trading", and that NDFs were over 40% of offshore FX trades in the real in 2016. It adds that NDFs trade onshore to some extent in the real. For the Colombian peso, it noted that data from the US trade repository DTCC showed sizeable NDF trading. Those are 2016 statements. This post relies on the BIS description of the limits and cites no rule text for them, and the 2025 survey tables below are the current check on the real.
"Non-deliverable" describes a market, not the money. Inside Brazil the real is deliverable, and Pix (Brazil's instant payment system, run by the Central Bank) moves it at any hour. What cannot happen is an offshore counterparty delivering either currency into a local account on its own.
A payment needs local currency in a local bank account, and only a participant that operates onshore can put it there. The last leg of every Lumx BRL or COP payout is a domestic transfer, which is why the offshore market never enters the picture.
How an NDF settles, with a worked example
An NDF settles once, in dollars, on a fixing: a reference rate observed on the settlement date. In Brazil a common reference is PTAX, the Central Bank's published rate, which our PTAX vs live quote post covers. No reais change hands.
A company owes a Brazilian supplier BRL 1,080,000 in 90 days and fears the real will strengthen. It sells USD 200,000 forward against reais at 5.40 (illustrative, not a market quote). At maturity the fixing is 5.10.
An NDF on USD 200,000 at 5.40, fixed at 5.10 (illustrative rates)
Step | Calculation | Result |
Contract rate | Agreed on day one | 5.40 BRL per USD |
BRL covered | 200,000 x 5.40 | BRL 1,080,000 |
Fixing at maturity | Published reference | 5.10 BRL per USD |
USD value of BRL 1,080,000 at the fixing | 1,080,000 / 5.10 | USD 211,764.71 |
NDF settlement paid to the company | 211,764.71 - 200,000 | USD 11,764.71 |
Reais delivered by the NDF | None | BRL 0 |
The hedge paid USD 11,764.71 because the real strengthened. The supplier is still owed BRL 1,080,000, and the company still has to buy them. If it buys at the fixing, its net cost is USD 200,000, which is the point of the hedge. But the purchase happens at a live quote, and a live quote is never exactly the fixing.
On Lumx the rate is a locked quote you pass on the transaction, or a floating reference that can move slightly at execution. Neither is a fixing observed at maturity, and the reais arrive by Pix.
Can an NDF pay a supplier in Brazil or Colombia?
No. An NDF moves a net dollar amount between two counterparties, and a supplier needs the full invoice in local currency in its own bank account. See paying Latin American suppliers from Europe. The two answer different questions.
NDF against onshore payout
NDF | Onshore payout | |
What moves | A net amount, usually in US dollars | The full amount in local currency |
Who receives reais or pesos | Nobody | The recipient's bank account |
Purpose | Fix the economics of a future payment | Make the payment |
Rate reference | A fixing observed at maturity | A spot quote |
Delivered over | A dollar payment between counterparties | Pix in Brazil, Bre-B or ACH Colombia in Colombia |
Lumx covers the second column. The payout goes from the customer's custodial wallet to a destination registered for the recipient, and the recipient sees local currency arrive.
How a stablecoin payout lands onshore in Brazil and Colombia
A stablecoin payout has three steps. The sender's USDC (a stablecoin that tracks the US dollar one to one) moves to the provider. The provider converts it into local currency through liquidity it holds locally. A domestic rail credits the recipient. The first step is global and the other two are local, so the delivery restriction behind the NDF never applies.
The onshore rails for BRL and COP
Country | Rail | What the recipient provides | What to know |
Brazil | Pix | The recipient's Pix details | Runs every day of the year, with no cut-off |
Colombia | Bre-B | The recipient's Bre-B key | Per-operation cap of 1,000 UVB (the basic value unit, revalued each year), about COP 12.1 million in 2026, and it applies to every provider |
Colombia | ACH Colombia | Name, document, bank, account number and account type | Pays to account details (ACH Colombia is the interbank clearing house for peso transfers) |
The Bre-B (Colombia's instant payment system) cap comes from the Banco de la República's Circular Reglamentaria Externa DSP-465, Asunto 18, numeral 3.2 (sheet of March 31, 2026), and the Banco's "Conozca Bre-B" page puts 1,000 UVB at COP 12,110,000 for 2026. The Lumx cut-off table lists Pix as 24/7/365 with no cut-off. The docs do not yet publish COP timing, and Bre-B is an instant rail by design.
Delivering reais is also a licensed activity. In Brazil, a provider of virtual asset services needs authorization from the Central Bank of Brazil (BCB) under Resolution 520/2025 of November 10, 2025, and Article 88 sets the transition for companies already operating. Resolution 521/2025 ties virtual-asset payments to the foreign exchange framework (Article 76A of Resolution 277/2022). The detail is in Brazil's stablecoin rules for 2026 and the PSAV licence explainer. For the peso leg, ask the provider which entity and which authorization stand behind it. On Lumx, COP runs through a banking partner's sponsored program, so the partner's licence covers the accounts Lumx opens for its clients.
On Lumx the Colombian rail is set per destination, when you register the recipient: Bre-B with a key, or ACH Colombia with account details. A Bre-B payout above the cap is rejected, never split or rerouted, because the destination fixes the rail. COP payouts accept USDC on Ethereum, Polygon or Base, and USDT on Ethereum, Polygon or Tron. The step by step version for Brazil is in sending USDC to Brazil, and the conversion leg is in the off-ramp explainer.
How liquid are the real and the peso?
Less than the headline suggests, and in a different place than a payment needs. The BIS Triennial Survey for April 2025 gives the daily turnover in each currency.
OTC FX turnover, daily average in April 2025, billions of US dollars (BIS Triennial Survey)
Measure | BRL | COP | MXN, for contrast |
Turnover, all products | 89.9 | 19.7 | 153.2 |
Share of global turnover (shares sum to 200%) | 0.94% | 0.21% | 1.60% |
Spot turnover | 14.7 | not broken out | 58.6 |
Outright forwards | 60.6 | not broken out | 22.3 |
Forwards as a share of the currency's turnover | 67% | not broken out | 15% |
NDFs in USD against the currency | 47.0 | not broken out | 0 |
Most of the real's turnover is in forwards, and the annex shows 47.0 of the 58.0 billion dollars of USD/BRL forwards were NDFs, about 81%. The Mexican peso, a deliverable currency, is the opposite: spot is 38% of its turnover and forwards are 15%. The BIS tables read do not split COP by instrument, so we quote no COP NDF share.
Depth in the real is mostly derivatives depth, while a payout needs onshore spot depth at the size sent. A thin spot market shows up as a wider spread on large tickets. How the spread is built is in how stablecoin payout pricing works.
Lumx converts against its own liquidity and that of institutional counterparties, among them BTG Pactual. The live rate for each pair is on USDC to BRL and USDC to COP.
Does a non-deliverable currency make the payout rate worse?
Not by itself. A payout is a spot conversion, and its price depends on the size, the spread and how much the market moves while the quote is open. Non-deliverable status matters in a different way: the forward and NDF markets for the real carry most of its trading, and the onshore spot rate is a separate price. The gap between a contract's fixing and a payout's quote is a cost to budget for.
On Lumx a floating rate is a live reference with no lock, good for showing an estimate. A locked rate fixes the conversion for 30 seconds, 1 minute or 5 minutes, and only the 30-second lock carries no fee. The longer locks add a fee that covers volatility risk. If a lock expires before the transaction is submitted, the quote is invalid and you request a new one.
Hedging the gap between the fixing and the quote
Two decisions get confused here. The hedge is a derivative decision: a counterparty, a fixing date and a notional. The payout is an operations decision: a rail, a cut-off and a destination.
I recommend keeping them on separate lines of the budget and under separate owners. When one team owns both, nobody owns the difference between the fixing and the quote, and that difference is where the surprise in the month-end report comes from. I would also check whether the exposure exists before pricing a hedge at all, because a company that collects reais by Pix and pays reais by Pix has already matched them, which is the case in natural FX hedge in Brazil.
When an NDF or a payout is the wrong tool
An NDF is the wrong tool when the aim is to deliver currency, and when the exposure is only days long. A spot payout is the wrong tool when the aim is to fix a price months ahead. It is also the wrong tool for a Colombian recipient registered on Bre-B when the amount is above the cap. Lumx fixes the rail per destination and refuses an above-cap Bre-B payout, so if amounts may exceed the cap, register the recipient on ACH Colombia from the start, which has no per-payment cap on Lumx.
What this looks like on a BRL and COP payout with Lumx
Lumx is stablecoin payments infrastructure for businesses that move money between Latin America and the rest of the world: one API to collect, hold, convert, and pay out in BRL, MXN, COP, USD, EUR, and GBP or in USDC and USDT, over local rails such as PIX, SPEI, PSE, Bre-B, ACH, FEDWIRE, SEPA, and Faster Payments, with SWIFT and on-behalf-of payments and collections (POBO and COBO) in USD, EUR, and GBP, plus named virtual accounts, custodial wallets, and KYB/KYC built in.
A BRL or COP payout on the global payments API is an off-ramp from the customer's custodial wallet to a registered destination. The status moves from the stablecoin transfer to the trade to the fiat transfer and then to success, and a webhook fires on each change. For BRL the fiat transfer is a Pix, and Lumx takes no fee out of the amount that reaches the recipient, so only the recipient's bank can charge. Bre-B works the same way. COP runs in the sandbox, so the first Colombian payout does not have to be a real one.
Verification comes first. The customer is verified once, each destination is verified before it can receive a payout, and the purpose of the payment is declared on the request. The rails and currencies are listed on the coverage page, and the operator map is the market map of LATAM stablecoin operators.
Methodology and sources
Turnover figures come from the BIS Triennial Central Bank Survey for April 2025, read on November 1, 2026: the survey page, Tables 3 and 4 in the main tables workbook, and Table 3.1 in the annex workbook. The shares and ratios are our arithmetic on those cells, and the tables read do not break COP out by instrument. The NDF and onshore statements are from BIS Quarterly Review, December 2016.
Product behavior was read on docs.lumx.io on November 1, 2026: Exchange Rates, Transactions, Destinations, Payment rail cut-off times and Coverage.
The Bre-B figure also rests on the Banco de la República's "Conozca Bre-B" page. Three norms are cited by name and number without a link, because the issuer's pages did not serve the text on November 1, 2026: BCB Resolutions 520/2025 and 521/2025 (the Central Bank's page loads only through a script) and the Banco de la República's Circular Reglamentaria Externa DSP-465 (its site answered with a bot check). Confirm the current Bre-B cap with the Banco de la República before building a limit into a payout run. The rates in the NDF example are illustrative.
Verified on November 1, 2026. Operational context, not legal, tax, or investment advice.
Cover photo: Guilherme Braga on Unsplash.
What are non-deliverable currencies like BRL and COP?
They are currencies that offshore markets trade through non-deliverable forwards (NDFs), which settle the price difference in US dollars instead of delivering reais or pesos. In its December 2016 Quarterly Review the BIS tied this to limits on home-market trading and on delivery of the currency offshore, and noted that NDFs also trade onshore to some extent in the real. That article is the source, not a current rule text. Inside Brazil and Colombia the currencies are deliverable, and Lumx pays both over local rails.
Can an NDF pay a supplier in Brazil or Colombia?
No. An NDF settles only the difference between a contract rate and a fixing rate, usually in dollars, so no local currency reaches a bank account. It can fix what a future payment will cost, but the supplier still needs a payout over Pix in Brazil or Bre-B or ACH Colombia in Colombia. On Lumx that payout starts from a custodial wallet.
How does a USDC payout deliver reais and pesos if the currency is non-deliverable offshore?
The conversion and the credit both happen onshore. The provider converts the USDC through local liquidity and a domestic rail credits the recipient, so no offshore delivery is needed. On Lumx the rail is Pix for BRL and Bre-B or ACH Colombia for COP, chosen per destination.
How liquid are BRL and COP compared with other currencies?
In the BIS survey for April 2025, the real traded 89.9 billion dollars a day and the Colombian peso 19.7 billion, against 153.2 billion for the Mexican peso. Most of the real's turnover is in forwards, and about 81% of USD/BRL forwards were NDFs. Lumx converts against its own liquidity and institutional counterparties, among them BTG Pactual.
Does the payout rate follow the NDF rate?
No. A payout settles at a spot conversion, while an NDF settles against a fixing on its maturity date, so the two rates differ. On Lumx the rate is either a floating reference that can move slightly at execution or a locked quote you pass on the transaction. You can lock it for 30 seconds, 1 minute or 5 minutes, and only the 30-second lock has no fee.
