The House of Representatives of the Brazilian Congress will discuss an initiative proposing to invest 5% of the entire foreign exchange reserves into bitcoin, creating a National Strategic Bitcoin Reserve Fund to diversify dependence on international fiat currencies. The central bank will be responsible for holding these assets.
Brazilian Lawmakers Ready to Discuss Regulation on Strategic Bitcoin Reserves
Brazil could become one of the first countries to clearly pass a regulation promoting the establishment of a national bitcoin reserve fund. The House of Representatives of the Brazilian Congress will discuss Bill 4501/2024, titled “Regulation on the Establishment of the Federal Government's National Strategic Bitcoin Reserve Fund and Other Measures” on August 20, after having been discussed and approved by various committees beforehand.
This project, initially introduced in November, aims to put Brazil at the forefront in the Latin American region by laying the groundwork for a central bank-managed bitcoin reserve fund, financed with a portion of the country's foreign exchange reserves. 5% of these reserves could be invested in BTC, totaling nearly $16.5 billion, according to central bank data from January.
The main argument for this move is to diversify Brazil's reserves, reduce dependence on exchange rate volatility and geopolitical risk, and enhance the economic resilience of national finances.
The bill stipulates that the central bank will organize the procurement and provide custody for these assets, presenting semi-annual reports to account for their status. Representative Eros Biondini, who proposed this bill, argues that although Brazil is one of the countries with the strongest acceptance, this has yet to be reflected in government strategies, placing Brazil at a disadvantage compared to other countries in the region.
Furthermore, the proposal considers this reserve fund as a potential support for the issuance of Drex, the digital currency of the Brazilian central bank (CBDC), which is currently still in the testing phase.
While local media have reported that this proposal has received support from both opposition parties and the ruling party, its passage may be affected by political fluctuations surrounding the arrest of former President Jair Bolsonaro, with opposition supporters claiming they might boycott the discussion.
