The economic risks of the Strategic Reserve of Bitcoin (RESBit) proposal and the potential impact on Drex, the Central Bank's digital real.

1. Economic Risks of the Strategic Reserve of Bitcoin

The proposal to allocate up to 5% of Brazil's international reserves (around $15 to $18.5 billion, equivalent to approximately 150,000 BTC based on current prices) to Bitcoin brings opportunities but also significant risks, which will likely be debated in tomorrow's hearing (08/20/2025). The main risks:

- Bitcoin volatility:

Bitcoin is known for its high volatility. For example, in 2021, the price fluctuated from $69,000 to less than $30,000 within months. If Brazil allocated $18 billion and the price dropped by 50%, it would represent an accounting loss of $9 billion. Although reserves are long-term, this fluctuation could generate political criticism and pressure on the Central Bank. On the other hand, advocates argue that Bitcoin's historical appreciation (averaging over 200% per year since 2013) could offset the risk.

- Liquidity risk:

Unlike gold or the dollar, Bitcoin is not widely accepted as a means of payment in international transactions. In an economic crisis, converting large amounts of BTC into fiat currencies could be slow or negatively impact the market due to limited liquidity on exchanges. The project envisions storage in cold wallets, which increases security but also complicates rapid conversion.

- Regulatory and geopolitical risk:

The adoption of Bitcoin in sovereign reserves could attract international scrutiny, especially from institutions like the IMF, which has already criticized El Salvador for its Bitcoin policy as legal tender. Additionally, countries like China have restricted crypto-assets, which could complicate trade relations if Brazil moves forward with RESBit.

- Opportunity cost:

Investing in Bitcoin means diverting resources from traditional assets like U.S. Treasury bonds or gold, which are less volatile. Critics, such as representatives from Febraban or the Central Bank, may argue that these assets offer greater stability to protect the National Treasury against currency or geopolitical crises.

- Fiscal and political impact:

The hearing takes place at a time of political instability, with Jair Bolsonaro under house arrest and obstructions in Congress. A bold proposal like RESBit could be used as a political weapon, further polarizing the debate. If poorly implemented, it could undermine trust in the Central Bank, especially if accounting losses are exploited by the opposition.

Proposed mitigations:

PL 4.501/2024 includes safeguards like storage in cold wallets (protecting against hacks) and audits by the TCU to ensure transparency. Additionally, the 5% reserve limit reduces total exposure, keeping the majority in traditional assets. Diversification is also defended as protection against the devaluation of fiat currencies, especially in scenarios of global inflation.

2. Impact on Drex (Digital Real)

Drex, the Central Bank's digital currency (CBDC) of Brazil, is in pilot testing and aims to modernize the financial system, increase banking inclusion, and facilitate transactions with blockchain technology. The RESBit proposal may interact with Drex in various ways:

- Technological synergy:

Both Bitcoin and Drex utilize blockchain, which could create synergies. The adoption of Bitcoin in sovereign reserves could accelerate the public sector's expertise in distributed ledger technologies (DLT). For instance, the Central Bank could use the experience with cold wallets from RESBit to enhance the security of Drex. Additionally, the PL provides incentives for blockchain research, which could benefit the development of the digital real.

- Promotion of the digital economy:

The legitimization of Bitcoin as a reserve asset could increase public confidence in crypto-assets and associated technologies, indirectly promoting Drex. For instance, companies already working with Bitcoin (like Méliuz, represented at the hearing) could integrate Drex into their platforms, creating a more robust financial ecosystem.

- Potential competition:

However, there is a risk of competition. Bitcoin, as a decentralized asset, may attract investors and users seeking alternatives to the traditional financial system, while Drex is centralized and controlled by the Central Bank. If Bitcoin gains traction as a store of value in Brazil, this could reduce Drex's appeal, especially among the crypto community, which values decentralization. The hearing may clarify how the Central Bank views this dynamic.

- Regulatory impact:

The regulation of Bitcoin for RESBit will require a clear legal framework, which could accelerate the creation of rules for crypto-assets in Brazil. This would benefit Drex, which also relies on a stable regulatory environment to operate on a large scale. The presence of ABcripto representatives at the hearing suggests that the private sector is aligned with this integration.

- Innovation in the public sector:

The RESBit project proposes that the Central Bank lead the management of Bitcoin, which could force the institution to modernize technologically. This could accelerate the implementation of Drex, which faces technical and logistical challenges, such as integration with existing banking systems and ensuring user privacy.

What to expect from the hearing?

Tomorrow, at 4 PM, the hearing will be crucial to understand the viability of RESBit. The Central Bank (represented by Luis Guilherme Siciliano) and Febraban (Rubens Sardenberg) will likely highlight the economic risks, while Diego Kolling (Méliuz) and Julia Rosim (ABcripto) are expected to defend the technological and strategic benefits. The absence of a representative from the Ministry of Finance may limit the debate on fiscal impacts, but the live broadcast will allow real-time monitoring of positions.

Follow-up suggestion:

- Watch the hearing on the Chamber of Deputies' YouTube channel to capture nuances of the debate.

- Monitor X after the event for reactions from the crypto community and opponents. Terms like 'RESBit', 'Bitcoin Brazil', or 'Drex' may provide real-time insights.

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