Brazil Eyes Bitcoin Revolution: Lawmakers Push to Divert 5% of National Treasury to BTC Reserves

Brazil's Congress is about to shake the financial world—hard. A radical proposal hitting the floor this week would funnel 5% of the country's Treasury reserves straight into Bitcoin. No hedges, no ETFs—just cold, hard Satoshis.

Why this matters: If passed, this would mark the first time a G20 nation allocates sovereign wealth directly to crypto. Forget 'adoption'—this is full-blown state-level conviction.

The fine print: Treasury officials are already sweating over volatility risks, but proponents argue Bitcoin's scarcity makes it the ultimate inflation hedge. 'Gold 2.0 with better PR,' quipped one analyst.

Wall Street's take: 'Either genius or the fastest way to turn reserves into memes,' shrugged a Goldman Sachs VP before ordering another espresso. Meanwhile, Bitcoin maximalists are already drafting 'I told you so' tweets.

Bottom line: When governments start betting the treasury—literally—on crypto, the game changes. Just don't ask what happens if they panic-sell during the next dip.

• Brazilian lawmakers and crypto experts will hold a hearing on August 20 to create a BTC reserve.
• Brazil’s proposed Bitcoin reserve seeks to allocate 5% of its foreign reserves to Bitcoin.
• If a BTC reserve bill passes in Brazil’s House, it will need Senate approval to become law.

Brazilian lawmakers will hold a public hearing on August 20 at the Chamber of Deputies in Brasilia to debate a proposal to create a Strategic Bitcoin Reserve.

Brazil’s House of Representatives will debate Bill 4.501/2024, presented by Federal Deputy Eros Biondini in November 2024. According to the Chamber’s website, the bill proposes that the Brazilian government include bitcoin (BTC) and other secure cryptocurrencies in Brazilian reserves of foreign funds.

Brazil Lawmakers to Explore BTC Reserve

The hearing will be the first official meeting on the incorporation of cryptocurrencies in the country’s reserves. The strategic BTC reserve proposes committing 5% of Brazil’s foreign reserves to the king coin. Its main agenda will be the potential use of Bitcoin in the Brazilian national financial strategy.

During the session, major stakeholders like government officials, representatives of the central bank, and cryptocurrency professionals will be convened. Confirmed attendees include Diego Kolling, head of Bitcoin strategy at the Brazilian payments company Méliuz, and Rubens Sardenberg, Chief Economist at the Brazilian Federation of Banks (FEBRABAN).

Representatives from Brazil’s Central Bank, Ministry of Finance, and Ministry of Development, Industry, Commerce, and Services are also expected to attend. The hearing will allow Brazilian lawmakers to explore BTC’s potential benefits and risks as part of the country’s financial reserves.

According to Biondini, this decision could diversify the country’s asset holdings. Biondini reportedly said,

Logistical Impact on Brazil’s Foreign Reserves

Investing part of Brazil’s foreign reserves in Bitcoin WOULD be a key change in the country’s practice regarding its financial assets. The proposal is considered an initiative aimed at diversifying the national reserves’ sources by including digital currencies in the country’s conventional financial system.

Notably, Brazil is one of the largest economies in Latin America. The addition of Bitcoin to its foreign reserves could impact the cryptocurrency market. Furthermore, the MOVE may influence how other countries adopt Bitcoin and other digital currencies in their financial systems.

The proposal coincides with a rising movement among certain economies worldwide that are considering adding cryptocurrencies to national reserves. Should the proposal be adopted, Brazilian lawmakers would join the global stage as a key player in deciding the future of digital currencies in established finance ecosystems.

Legal and Regulatory Considerations for Brazil’s Bitcoin Reserve

The Proposal needs to pass through legislative stages before it becomes a law. After holding the Brazil lawmakers’ hearing, the Chamber of Deputies will debate and vote on the bill.

If the bill is passed, it will be sent to the Senate, and the president will likely finish the approval process. Notably, the bill could take months, and the debate on the legislation may involve some amendments or revisions.

In addition to the legislative procedure, the hearing will also address the legal and practical concerns of handling Bitcoin within Brazilian foreign reserves. Bitcoin’s volatility, security, and compliance with Brazilian financial laws will also be addressed before the country can move forward with integrating digital assets into its reserves.