- By employing blockchain and AI, the Central Bank will monitor the Bitcoin reserve.
- The objective of the proposal is hedging against geopolitics and currency volatility.
A radical bill to establish a Strategic Bitcoin Reserve is also being prepared for debate by the Brazilian legislators. The next hearing on this bill is August 20, 2025, and is the first official debate on this bill.
It offers 5 percent of the huge foreign reserves of Brazil of about US 17 billion to Bitcoin. This radical step aims to diversify and reinforce the national financial resources the state owns and controls.
Could Bitcoin Become Brazil’s New Financial Shield?
Proposed in November 2024 by a congressman named Eros Biondini, the bill, formally known as PL 4501/2024, takes Bitcoin as a shield against currency volatility and geopolitical risks.
It is estimated that Brazil’s foreign reserve is currently close to 341 billion dollars, with fiat currencies such as the United States dollar being the most prominent contributors. Bitcoin adoption could be a strategic way to protect the Brazilian economy against the shocks of the outside world and adopt the innovation of digital assets.
The trial will take place in the Chamber of Deputies in Brasilia. The Central Bank of Brazil, the Ministry of Finance, and crypto advocacy groups will voice their opinions as key institutions.
The legislators of Brazil will consider the possibility of creating more economic resilience and promote blockchain technologies in the country through the Bitcoin reserve.
Why Bitcoin, Why Now?
Brazil is no stranger to crypto evolution. In June 2023, the country approved a few cryptocurrency ETFs (such as the popular FOMO11 and DEFI11 funds) and proceeded to clear a defined regulatory framework.
This framework enables the central bank of Brazil to regulate the virtual asset service providers and provides a more secure ecosystem of cryptocurrencies.
Proponents of the bill claim that Bitcoin has a role to play as a form of digital gold and may be used as collateral on the forthcoming central bank digital currency in Brazil, Real Digital. In addition, the bill intends to purchase Bitcoin in a cautious and gradual manner that shall not risk exposing it recklessly.
The Central Bank would have stringent control over management of these reserves using blockchain and artificial intelligence technology with harsh penalties in case of mismanagement.
Echoes of a Global Movement
Brazil is becoming one of a small and increasing number of countries which are considering Bitcoin seriously to include in national reserves. As frequently mentioned by the proponents of the bill, El Salvador declared Bitcoin legal tender in 2021.
Possesses approximately 6000 BTC worth hundreds of millions of dollars. The U.S. is also playing with the idea of establishing a Strategic Bitcoin Reserve as a means of controlling its finances.
The move by Brazil comes at a time when the rest of the world is showing interest in integrating conventional finance with digital currencies. The possible advantage is that it can stabilize national economies against currency fluctuations. It can also help withstand geopolitical strains through the decentralized nature of Bitcoin.
