Brazil has introduced a groundbreaking bill that could reshape its financial strategy by incorporating Bitcoin into its sovereign reserves. Congressman Eros Biondini presented the proposal on November 25, aiming to create a Sovereign Strategic Bitcoin Reserve, referred to as RESBit. If approved, this initiative would make Bitcoin a part of Brazil’s $355 billion reserve, currently dominated by fiat currencies such as the U.S. dollar.
The bill highlights Bitcoin’s potential to shield Brazil from currency volatility and geopolitical uncertainties. It also suggests that Bitcoin could act as collateral for Brazil’s upcoming central bank digital currency, the Real Digital, called Drex.
Inspired by Els Salvador’s Bitcoin experiment
Brazil’s proposed strategy draws inspiration from El Salvador, the first country to adopt Bitcoin as legal tender in 2021. El Salvador now holds nearly 6,000 BTC, valued at approximately $542 million. According to the bill, El Salvador’s experience demonstrates how Bitcoin can bolster sovereign reserves and attract global investment.
Brazil’s approach, however, would operate on a much larger scale. The legislation proposes capping Bitcoin at 5% of the nation’s reserves and implementing a gradual acquisition process. Brazil’s central bank oversees the reserves, while blockchain and artificial intelligence manage transactions transparently through public systems. A tech advisory committee would be responsible for security and operational oversight. The bill outlines penalties ranging from fines to criminal charges to deter mismanagement.
The legislation is still in its early stages. The Speaker of the House currently holds the bill, which must pass through committee debates before it can proceed.
Crypto imports soar amid rising trade volumes
As lawmakers consider Bitcoin reserves, Brazil’s crypto trade continues to grow. Data from the Central Bank of Brazil shows crypto imports reached $1.4 billion in September 2024, a 40% increase compared to $1 billion in the same month last year. Exports, however, remained stagnant at $44 million during the same period.
Net crypto trade in Brazil surged to $1.385 billion in September, up from $987 million a year earlier. Between January and September, crypto imports totaled $13.7 billion, marking a 60% jump from the $8.4 billion recorded during the same period in 2023. Stablecoins dominate these transactions, accounting for 70% of all crypto trades.
Stablecoin regulations on the horizon
As crypto activity accelerates, Brazil is preparing new stablecoin regulations that are expected to take effect in 2025. Lawmakers are discussing the potential taxation of stablecoin transactions conducted through exchanges. These measures aim to bring greater oversight to Brazil’s growing crypto economy.
The introduction of RESBit reflects Brazil’s ambition to innovate its financial system while capitalizing on the expanding role of digital assets. However, the bill’s progress will depend on political consensus and regulatory scrutiny.