TL;DR
- Brazil is considering creating a Bitcoin reserve called RESBit as part of a new legislative proposal aimed at protecting its economy.
- Inspired by El Salvador’s Bitcoin initiative, the plan involves Bitcoin as a sovereign asset, with a 5% cap on its share in Brazil’s reserves.
- Brazil’s crypto trade has surged in recent years, with stablecoins now dominating the majority of crypto transactions.
On November 25, 2024, Brazilian Congressman Eros Biondini introduced a bill proposing the creation of a Sovereign Strategic Bitcoin Reserve called RESBit. This initiative aims to incorporate Bitcoin as a key asset within Brazil’s sovereign reserves, which are valued at $355 billion and predominantly composed of fiat currencies like the U.S. dollar. If passed, this bill could mark a significant shift in Brazil’s financial landscape by allowing the country to hold Bitcoin as a hedge against currency volatility and global economic uncertainty.
The proposal is heavily inspired by El Salvador’s decision in 2021 to adopt Bitcoin as legal tender, a move that surprised the world and led the country to accumulate nearly 6,000 BTC. The Brazilian government sees El Salvador’s experience as a model, suggesting that Bitcoin could diversify Brazil’s economic portfolio and attract investment, while also serving as collateral for the country’s upcoming central bank digital currency, Drex, or Real Digital.
Brazil Seeks to Replicate the Salvadoran Model
The bill outlines a limit on Bitcoin holdings within Brazil reserves, capping the digital asset at 5% of the total reserve value. To prevent speculative buying, the purchase of Bitcoin would be gradual, ensuring that it is integrated into the reserve system in a controlled manner. The management of the reserve would be overseen by Brazil’s central bank, with blockchain and artificial intelligence technologies handling the operational processes through public systems. Additionally, a security advisory committee would be established to safeguard the integrity of the reserve.
This proposed law is still in the early stages of legislative review. Once it passes through the Speaker of the House, it will be debated in various committees. At present, the focus on Bitcoin is part of a broader push to modernize Brazil financial systems, with the country’s cryptocurrency imports reaching $1.4 billion in September 2024—a 40% increase from the previous year. Meanwhile, stablecoins dominate Brazil’s crypto market, accounting for 70% of crypto transactions.
The Brazilian government is also working on regulatory measures for stablecoins, which could take effect in 2025, including possible taxation of stablecoin transactions.
