Could Brazil be the next to establish a bitcoin strategic reserve? Legislation is currently under consideration by Congress to facilitate this development. Last week, the Chamber of Deputies heard the measure proposed by Federal Deputy Eros Biondini. Brazil is set to invest 5% of its $344 billion overseas reserves in bitcoin. The concept, drawing from US and various other initiatives, aims to diversify Brazil’s reserve assets, mitigate currency and geopolitical risks, and establish Brazil as a frontrunner in digital asset innovation.
It also necessitates reporting to Congress every six months and the secure cold storage of assets. Biondini stated that the initiative will maintain economic sovereignty, align with global innovation trends, and establish Brazil as a global leader: “Brazil is always playing catch-up, but it’s great to see that this time we’re at the forefront.” Deputy Luiz Philippe de Orléans e Bragança, along with other government officials and the Economic Development Committee that organized the hearing, expressed their backing for the proposal: No new adoptions are taking place. Bitcoin is becoming institutionalized. Countries, sovereign wealth funds, and large institutions are embracing bitcoin because of its extensive reach. Pedro Henrique Guerra, chief of staff to Brazil’s Vice President Geraldo Alckmin, stated that the government’s approach to bitcoin investments should focus on long-term objectives, suggesting that an enhanced form of digital gold could strengthen the nation’s economy: “With bitcoin-backed Treasury bonds and thematic funds for long-term infrastructure and education policies, we will face a revolution in our public finances.”
Officials from the Brazilian government and Central Bank were against the proposal. It is not unexpected that the concerns of the authorities were rooted in technical aspects rather than ideological ones. Bitcoin is intriguing; however, Brazil’s Ministry of Finance official Daniel Leal stated that it has not yet qualified as a reserve asset. “I have no negative opinion about bitcoin.” I acknowledge its importance and usefulness,” said Leal. But intentions must be distinguished. The Central Bank oversees international reserves, which are closely linked to the nation’s financial stability. The chief of the Central Bank’s Department of International Reserves, Luis Guilherme Siciliano, acknowledged that bitcoin’s volatility makes it unsuitable for the bank’s reserve basket.
“Central banks are conservative by nature.” Therefore, international reserves should consist of assets with low volatility. Siciliano noted that local markets experience significant volatility spikes during times of stress or acute crises, particularly geopolitical crises. Therefore, reserve assets should provide stability and serve as a buffer for the central bank to utilize during critical times. Leal suggested a sovereign wealth fund managed by the Ministry of Finance, though it would present complexities. In Brazil, the year 2026 holds significant importance for the adoption of Bitcoin. Regardless of any challenges faced, this initiative remains vital for educating and enlightening leaders about emerging trends. The key point is that the nation continues to intend to observe global changes and evaluate risks and opportunities. Maintaining national awareness of upcoming strategic trends Nonetheless, certain executives in the Brazilian sector are pushing for increased urgency, particularly given the rapid change in the US stance on the asset following the presidential transition. Other nations ought to take similar action.
Julia Rosin, Bitso Brasil’s head of public policy, emphasized that “ignoring this movement could represent a missed strategic opportunity for Brazil, especially as other countries structure policies to integrate virtual assets into their financial systems.” An e-commerce company that became Brazil’s first bitcoin treasury company in May, head of bitcoin strategy Diego Kolling reframed the question in his hearing testimony: “The question is not whether Brazil needs bitcoin, but how long we can afford to ignore it.”