Brazil might be rewriting the rulebook on sovereign reserves. On November 25, Congressman Eros Biondini dropped a bill that could shake up Brazil’s financial system.
The legislation proposes the creation of a Sovereign Strategic Bitcoin Reserve, cleverly dubbed RESBit. If passed, this would make Bitcoin a key part of the country’s sovereign assets, alongside its $355 billion reserve dominated by fiat currencies like the U.S. dollar.
The bill argues that a Bitcoin reserve could shield Brazil from currency swings and global political chaos. Plus, Bitcoin would double as collateral for Brazil’s upcoming central bank digital currency, Real Digital—nicknamed Drex. It’s bold, it’s risky, and it’s very Bitcoin.
A plan inspired by El Salvador
The bill points to El Salvador, the OG in Bitcoin experimentation. In 2021, El Salvador shocked the world by making Bitcoin legal tender. Fast-forward to today, and they hold nearly 6,000 BTC worth about $542 million. Brazil seems to have taken notes.
The bill says El Salvador’s economy is proof that Bitcoin can work for sovereign reserves. The Central American country used Bitcoin to diversify its economy and attract investment. Brazil’s plan? Similar moves but on a much larger scale.
The proposed cap for Bitcoin in Brazil’s reserves is 5%, and the buying process will be phased. No wild crypto shopping sprees here.
Control will still sit firmly in the hands of Brazil’s central bank. But here’s the twist: blockchain and AI will manage these reserves through public systems. A tech advisory committee, featuring security experts, will ensure the whole operation doesn’t go off the rails. And speaking of rails, the bill includes strict penalties for mismanagement. Violators could face everything from fines to criminal charges.
But nothing’s set in stone. Right now, the Speaker of the House has the bill. Once reviewed, it’ll head to committees for debate. So, we’re in the early innings, but the pitch has been thrown.
Brazil’s crypto trade numbers are skyrocketing
While lawmakers debate Bitcoin reserves, Brazil’s crypto economy is already on fire. Data from the Central Bank of Brazil shows crypto imports hit $1.4 billion in September 2024. That’s a 40% jump from the $1 billion recorded the same month last year.
Meanwhile, crypto exports barely moved, sitting at $44 million in September 2024 compared to $45 million in 2023. Bottom line? Brazil’s net crypto trade is surging, with $1.385 billion in remittances last September, up from $987 million the year before.
It’s not just a monthly blip. From January to September, Brazil imported $13.7 billion worth of crypto assets. That’s a 60% leap compared to the $8.4 billion recorded during the same stretch in 2023. And stablecoins? They’re stealing the spotlight, making up 70% of all crypto transactions.
Meanwhile, lawmakers are working on stablecoin regulations set to roll out in 2025. There’s even talk of taxing stablecoin transactions conducted through exchanges.
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