Author: Ana Paula Pereira, CoinTelegraph; Translated by: Bai Shui, Golden Finance
A recently proposed bill in the Brazilian Congress plans to establish a sovereign federal Bitcoin reserve, which could reshape the country's attitude towards digital assets.
The bill was introduced on November 25 by Congressman Eros Biondini, aiming to establish a sovereign strategic Bitcoin reserve named RESBit.
According to this legislation, the Bitcoin reserve can protect the country's sovereign reserves from currency fluctuations and geopolitical risks, while also serving as collateral for the country's upcoming central bank digital currency 'Real Digital' (Drex).
A sovereign reserve is a pool of assets held by a country's central bank, typically used to support the national currency, stabilize the economy, and facilitate international trade. As of December 2023, Brazil has reserves of $355 billion, mainly backed by assets pegged to global fiat currencies like the dollar.
According to the proposed legislation, the Bitcoin reserve will be supplemented by phased purchases of existing financial assets, up to 5% of the country's reserves. Supported by a technical advisory committee composed of security experts, the country's central bank will still manage the assets through a public system powered by blockchain and artificial intelligence technologies.
Brazil's RESBit Bill. Source: Chamber of Deputies
The bill positions El Salvador's move towards Bitcoin as an example of progress. This Central American country made Bitcoin legal tender alongside the dollar in 2021, seeking to enhance financial inclusion and attract foreign investment.
Since then, the Salvadoran government has been actively purchasing Bitcoin, and as of November 26, the Salvadoran government holds nearly 6,000 Bitcoins, worth $542 million.
According to the proposed Brazilian legislation, Bitcoin has helped El Salvador achieve economic diversification over the past four years.
The bill also includes penalty clauses for violations or mismanagement of RESBit, indicating that offenders may face administrative or criminal sanctions.
The legislation is currently under review by the Speaker of the Brazilian Chamber of Deputies, and once approved, it will be submitted to various committees for debate.
Brazil has been advancing guidelines for digital assets. In June 2023, the country implemented a legal framework granting the central bank the authority to regulate and supervise virtual asset service providers. Furthermore, tokens qualifying as securities continue to be regulated by the country's securities commission.
