The government of Brazil moved its Bitcoin Reserve bill to an advanced stage as it received approval from the first committee.
Brazil is one step closer to becoming the second Latin American country, after El Salvador, to hold Bitcoin as part of its national reserves. A key committee in Brazil’s government has approved a bill that would allow the country to invest up to 5% of its foreign reserves into Bitcoin, which is around $18.5 billion.
Why Does Brazil Want a Bitcoin Reserve?
The bill, called PL 4501/2023, argues that Bitcoin is like “digital gold” and could help protect Brazil’s economy from inflation and global financial risks.
Pedro Giocondo Guara, an advisor to Brazil’s Vice President, has called Bitcoin “crucial for national prosperity.”
“Rigorously debating the constitution of a sovereign reserve of bitcoin value is in the public interest and will be decisive for our prosperity. After all, Bitcoin is digital gold, the gold of the internet. It’s a technology that allows us to transmit wealth from one end of the planet to the other quickly and store the fruits of our labor efficiently and securely,” Guerra remarked earlier.
If passed, Brazil would follow El Salvador, which made Bitcoin legal tender in 2021 and has since bought over 5,750 BTC (worth around $350 million today). El Salvador’s Bitcoin investments have already turned profitable, and the country has used Bitcoin to attract tourism and tech investments.
How Would Brazil’s Plan Work?
Unlike El Salvador, which made Bitcoin an official currency, Brazil’s approach is more cautious:
- The government would slowly buy Bitcoin, storing it in ultra-secure “cold wallets.”
- A team of experts would monitor the reserve to prevent fraud or losses.
- Bitcoin could also support Brazil’s upcoming digital currency (Drex).
The bill still needs approval from three more committees before going to Brazil’s Congress. If it passes, President Lula could sign it into law—making Brazil the second nation after El Salvador to officially hold Bitcoin in its reserves.
If Brazil succeeds, other countries might follow. The U.S. has already started a “Strategic Bitcoin Reserve,” and nations like Argentina and the Czech Republic are exploring similar moves.
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