Brazilian Lawmakers Push for Strategic Bitcoin Reserve
Brazilian lawmakers have reintroduced a significant legislative proposal, Bill No. 4501/2024, aimed at establishing a Strategic Sovereign Bitcoin Reserve (RESBit). This initiative seeks to integrate Bitcoin into Brazil's national financial strategy, with an ambitious goal of acquiring at least one million Bitcoin (BTC) over a five-year period to diversify the country's national reserves.
The bill, originally authored by Federal Deputy Eros Biondini and with Federal Deputy Luiz Gastão serving as rapporteur, is currently under review by the House Committee on Economic Development. If approved, this move could position Brazil among the leading nations in terms of state-held Bitcoin reserves, potentially surpassing current major holders.
Key Provisions and Objectives of RESBit
The proposed RESBit framework outlines several key provisions designed to establish a robust and transparent national Bitcoin reserve:
- Acquisition Target: A planned and gradual accumulation of at least 1,000,000 BTC over five years.
- Taxation: The bill proposes permitting tax payments in Bitcoin and exempting Bitcoin transactions from capital gains tax.
- Custody and Security: The reserve would be maintained by the Brazilian Treasury, with management responsibilities shared by the Brazilian Central Bank and the Ministry of Finance. Secure storage measures, including cold wallets and multi-signature protocols, are mandated.
- Transparency and Reporting: The legislation requires public disclosure of RESBit's Bitcoin holdings through internet-based platforms and mandates semi-annual reports to Congress on custody, performance, and usage.
- Additional Measures: The bill also includes provisions to safeguard users' rights to self-custody, ensure transaction privacy, and prohibit the sale of Bitcoin seized by judicial authorities. It also allows for temporary holdings of spot Bitcoin ETFs under urgent and limited circumstances.
Economic Rationale and Potential Impact
Proponents of the bill argue that a national Bitcoin reserve would offer significant economic advantages for Brazil. The primary motivations include diversifying national assets, hedging against inflation and currency volatility, and protecting against geopolitical risks. Furthermore, lawmakers believe that integrating Bitcoin could support the development and credibility of Brazil's central bank digital currency, the Digital Real (Drex), by providing an additional layer of backing.
The initiative is also seen as a way to promote financial inclusion, attract investment, strengthen technological capabilities, and position Brazil at the forefront of digital finance in Latin America. The estimated expenditure to acquire one million BTC is nearly $68 billion.
Legislative Journey Ahead
The reintroduction of Bill No. 4501/2024 marks a renewed push for Brazil's engagement with digital assets at a sovereign level. Following its review by the House Committee on Economic Development, the bill is slated to undergo sequential review by several other committees, including those on Science, Technology and Innovation, Finance and Taxation, and Constitution and Justice, before potentially moving to full consideration and Senate approval. The legislative process will involve careful consideration of the bill's alignment with existing central bank regulations, which currently do not recognize Bitcoin as a reserve asset.
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