Key Takeaways
- The legislation is currently under review in Brazil’s House of Representatives and will be subject to debate by committees
- As per Biondini, this is intended to protect the country from currency fluctuations and geopolitical risks
A new bill introduced in Brazil’s Congress on November 25 by Congressman Eros Biondini seeks to establish a Sovereign Strategic Bitcoin Reserve, referred to as RESBit.
The proposal aims to integrate Bitcoin into Brazil’s national financial reserves, potentially diversifying up to 5% of the country’s international reserves through the acquisition of Bitcoin. As per Biondini, this is intended protect the country from currency fluctuations and geopolitical risks, while also encouraging the growth of blockchain tech.
The RESBit would be managed by the Central Bank of Brazil, working alongside the Ministry of Finance, and would utilize advanced tools such as blockchain and artificial intelligence for monitoring and security. Biondini’s bill highlights the potential of Bitcoin as a hedge against economic instability and as a means to position Brazil at the forefront of the global digital economy.
Biondini’s proposal is also seen as a way to support Brazil’s future central bank digital currency (CBDC), the Real Digital (Drex), by providing additional collateral and stability. The bill mentions that integrating Bitcoin into Brazil’s reserves could contribute to the long-term sustainability of Drex, which is being developed to facilitate secure and efficient digital transactions within the country.
The bill draws comparisons to El Salvador, which made Bitcoin legal tender in 2021. The Brazilian proposal takes inspiration from El Salvador’s example, suggesting that Bitcoin could be used to diversify Brazil’s financial reserves and attract investment.
The proposed Bitcoin reserve would be phased in gradually, with the Central Bank managing the reserve and ensuring its security through measures such as cold wallets and decentralized backup protocols.
A technical advisory committee of experts would assist with decision-making and oversee the proper management of the reserve. The bill also includes provisions for educational programs on blockchain and cybersecurity, as well as incentives for startups in the blockchain space.
The bill also states penalties could be applied for poor management or noncompliance with the proposed guidelines. These penalties would include administrative or criminal sanctions. The legislation is currently under review in Brazil’s House of Representatives and will be subject to debate by committees before any final decisions are made.
Brazil’s recent efforts to integrate digital assets into its financial system come after the implementation of a legal framework in June 2023, granting the Central Bank the authority to regulate virtual asset service providers. Earlier this week, the Central Bank opened public consultations on the regulation of digital assets.
