Brazil, one of the leading nations in cryptocurrency adoption and the ninth-largest economy in the world, is called to play a pivotal role in the future of bitcoin as a strategic reserve asset. Last month, Brazilian Federal Deputy Eros Biondini introduced a bill that proposed using 5% of the country’s international reserves for bitcoin, being one of the first countries besides the U.S. currently working on this enabling regulation.
If passed, this bill would have a gigantic impact on bitcoin prices and popularity, due to its adoption by one of the top world economies. According to Valor Economico, Brazil currently holds $372 billion as part of its foreign currency reserves, making this a possible $18.6 billion investment in bitcoin.
However, this measure’s biggest impact may not be linked to the possible price appreciation of bitcoin but to its effect on other economies, which would also be encouraged to follow in Brazil’s footsteps. Furthermore, If successful, this action could have a multiplicative effect, as Brazil will assume the presidency of BRICS next year, and might sway the organization to support a bitcoin reserve for the group if this experiment is successful.
Such a move would have a humongous effect on the world economy, as one of the two largest economic blocs in the world would turn to bitcoin as a tool to stabilize its reserves. This is why Trump’s campaign crypto aide and CEO of BTC Inc. David Bailey has called to accelerate the adoption of a strategic bitcoin reserve in the U.S. to avoid being frontrunned by other nations also eyeing bitcoin for its properties.
Read more: Trump’s Crypto Aide: U.S. Should Act Quickly to Incorporate a Strategic Bitcoin Reserve
President Lula is a major believer in de-dollarization, and shifting the power from the dollar to another currency might be seen as a win for the block. However, President Trump’s latest statements on 100% tariffs could also affect these decisions and future developments.
Read more: Lula Proposes to Revitalize South America Union USAN; Reinforces Need of Shifting Away From US Dollar
Read more: Prelude to Currency War? Trump Threatens 100% Tariffs to BRICS Countries Abandoning the ‘Mighty’ Dollar
