Brazil’s Congress to Hedging Bitcoin Reserves Against Global Threats
A newly proposed bill in Brazil's Congress plans to establish a sovereign federal bitcoin reserve, which could shape the country's approach to digital assets.
The bill It was introduced by Congressman Eros Biondini on November 25th and seeks to create a sovereign systematic bitcoin reserve known as RESBit.
According to the law, Bitcoin (BTC) reserves can protect the country's sovereign reserves from currency fluctuations and geopolitical risks, as well as serve as collateral for the country's upcoming central bank digital currency called Real Digital (Drex).
A sovereign reserve is a stock of wealth held by a country's central bank, which is mainly used to support the country's fiat currency, stabilize the economy, and support international trade. Brazil in 2010 It had $355 billion in reserves as of December 2023, backed primarily by assets linked to international currencies, such as the US dollar.
Under the proposed law, the BTC reserve will complement existing financial assets up to a maximum of 5% of the country's reserves through phased purchases. The country's central bank still manages its assets through public systems supported by blockchain and artificial intelligence technologies, supported by a technical advisory committee formed by security experts.
Brazilian RESBit account. Source: House of Representatives
Related: Brazil's Crypto Imports Soar 40% in September
The bill points to El Salvador's foray into bitcoin as an example of progress. The Central American country made Bitcoin legal tender in 2021 to boost financial inclusion and encourage foreign investment.
Since then, the government of El Salvador has been buying nearly 6,000 BTC of bitcoins, worth $542 million on November 26.
Bitcoin has helped El Salvador grow its economy over the past four years, according to a bill introduced in Brazil.
The bill also includes provisions for penalties for non-compliance with the RESBit rules or poor management, which states that violators may face administrative or criminal sanctions.
The bill, which is now being reviewed by the speaker of the Brazilian House of Representatives, will be referred to committees for debate after approval.
Brazil is advancing guidelines for digital assets. In June 2023, the country implemented a legal framework that gives the central bank the power to monitor and regulate virtual asset service providers. Additionally, tokens that qualify as securities continue to be regulated by the country's Securities and Exchange Commission.
Related: Argentina overtakes Brazil in crypto inflows – Chainalysis
