Emily Walker
Brazil is making strides to include cryptocurrency in its financial system with the introduction of a bill aimed at establishing a national Bitcoin reserve, proposed by federal deputy Eros Biondini.
Overview of Brazil’s Bitcoin Reserve Initiative
On Monday, Biondini filed legislation for the creation of the Sovereign Strategic Bitcoin Reserve (RESBit). This initiative is intended to enhance the financial portfolio of Brazil’s National Treasury.
The purpose of the bill is to safeguard Brazil’s reserves against currency fluctuations and geopolitical challenges, encourage the use of blockchain technology in both public and private sectors, and support the issuance of Drex, Brazil’s upcoming digital currency.
Biondini stressed that the establishment of RESBit is a crucial strategy that could position Brazil as a leader in the digital economy. He stated in a local media interview:
Implementing this project is vital to securing the country’s economic autonomy and keeping Brazil in line with global innovation trends.
Educating the Public on Cryptocurrency
The legislation also mentions a systematic plan for accumulating Bitcoin, suggesting a phased approach that limits holdings to 5% of Brazil’s international reserves, ensuring these assets are managed through cold storage.
Furthermore, any expenditures from this reserve will need to adhere to Brazil’s Fiscal Responsibility Law, maintaining fiscal discipline. The bill requires that all transactions be reported biannually to the National Congress for transparency.
The management of the Bitcoin reserve is expected to fall under the Central Bank of Brazil’s purview, in partnership with the Ministry of Finance. The Central Bank will develop systems for monitoring and controlling these assets using AI and blockchain to ensure “operational integrity.”
Additionally, the bill includes educational initiatives to inform the public about cryptocurrency. Biondini acknowledged the increasing significance of digital currencies, pointing out that their total global market capitalization has recently exceeded $3 trillion.
Despite the price swings typical of cryptocurrencies, the deputy argues they are being accepted more widely as a credible asset class. He suggests that nations employing effective strategies to integrate with cryptocurrencies will see substantial long-term advantages.
Currently, Bitcoin is valued at $92,620, having recently experienced a 7% dip over four days after nearing the $100,000 mark last week. Nevertheless, Bitcoin is up 37% for the month compared to longer time scales.
Image credit: DALL-E, chart data from TradingView.com