Brazil is contemplating legislation to create a $19 billion strategic reserve in Bitcoin
Brazil’s Chamber of Deputies is gearing up to host a critical hearing on the proposed legislation that could see the establishment of a Bitcoin Strategic Reserve (RESBit) worth a substantial $18.6 billion. This legislative initiative, officially known as Bill 4501/24, aims to modernize Brazil’s treasury management system by integrating bitcoin into its financial framework. The primary objective behind this move is to shield the nation’s international reserves from the impact of exchange rate fluctuations and global uncertainties.
Lawmaker Eros Biondini spearheaded the introduction of this groundbreaking bill, drawing attention to the widespread adoption of blockchain technologies by several nations, including El Salvador, the United States, China, Dubai, and the European Union. If passed, the custody of the proposed Bitcoin Strategic Reserve will be entrusted to Brazil’s Central Bank and Finance Ministry. Additionally, the bill mandates the submission of biannual performance and risk assessment reports to ensure transparency and accountability.
Brazil has emerged as a key player in the Latin American cryptocurrency landscape, ranking 10th globally in terms of digital asset transactions. Data provided by the Brazilian tax authority indicates that the country witnessed nearly $76 billion in digital asset trading activities last year. By contemplating the establishment of a digital asset reserve like RESBit, Brazil is aligning itself with a growing cohort of nations exploring alternative investment avenues to mitigate risks associated with traditional currencies.
Following the scheduled hearing on August 20, the proposal will undergo rigorous scrutiny by four key Chamber committees: Economic Development, Science Technology and Innovation, Finance and Taxation, and Constitution Justice and Citizenship. Approval from each of these committees is imperative before the bill can progress to the full Chamber and subsequently to the Senate.
Deputy Luiz Philippe de Orleans e Bragança, the proponent of the hearing, underscored the significance of soliciting insights from a diverse array of stakeholders, including monetary authorities, government officials, banking professionals, and technical experts. He stressed the importance of incorporating feedback from the Central Bank to refine the legislative text and optimize its operational efficacy.
Noteworthy speakers slated to participate in the hearing include Diego Kolling, Méliuz’s Bitcoin strategy chief, and Julia Rosim, who serves as the policy coordinator at ABcripto and heads public policy at Bitso. Technical assessments and insights gleaned from the hearing are poised to inform subsequent evaluations by the Chamber committees and potentially steer amendments to the bill’s contents.
Should the legislation successfully navigate the legislative labyrinth and secure approval, it would mark a pivotal moment for Brazil in its journey towards seamlessly integrating bitcoin into its sovereign reserve management framework. This bold step forward underpins the nation’s diligent efforts to embrace emerging financial technologies and diversify its financial assets to safeguard against traditional currency risks.
