That’s bold for a national financial policy: Brazilian lawmakers have introduced a proposal to kick 5% of the country’s $370 billion treasury into a Bitcoin reserve. The move would limit Brazil’s Bitcoin holdings to around $18.5 billion should it be passed, based on the cryptocurrency’s current $1.83 trillion market size.
Only if the bill passes the Chamber of Deputies and moves on to the Senate and the President for his approval will it be law. Advocates say the measure could act as an economic armor against the instability in global financing, taking advantage of Bitcoin’s decentralized, inflation resistant nature.
Nowadays, Bitcoin has become a popular idea of a strategic reserve for countries. Last week, Senator Cynthia Lummis presented a model whereby the federal government would buy 4% of Bitcoin’s total supply over the next 5 years.
Global Push for Bitcoin Reserves Expands with Brazil
Under President Donald Trump, crypto related policies were top priorities and the president filled key blockchain advocate positions in his administration and floated the position of a ‘Crypto Czar’ to help guide digital asset strategy.
The potential value of Bitcoin reserves has been illustrated by missed opportunities in Europe. Back in July, Germany had been harvesting $3 billion of Bitcoin sales, when the price was less than $54,000. At this point, bitcoin is trading beyond $91,000, peaking this month around $99,600 — meaning the sale cost Germany roughly $1.5 billion in potential profits.
Across political landscapes, calls for adoption of Bitcoin are ringing. In an op-ed for Bloomberg columnist Merryn Somerset Webb recently, she suggested that the U.K.’s Labor-led government should put the $5 billion cryptocurrency fund to use to help revitalize the economy. Polish presidential hopeful Sławomir Mentzen meanwhile promised to launch a national Bitcoin reserve if elected in 2025.
Cryptocurrency is also being used by smaller nations. But following that China has integrated even seized Bitcoin into state controlled reserves and in Bhutan, Bitcoin mining is being embraced as a national revenue source.
Brazil’s proposal is another sign that as bitcoin becomes more accepted as a currency, it is increasingly being embraced by sovereign economic strategy. If passed, it would align with the lead taken by several emerging markets who are staking their claims in the markets for cryptocurrency: Brazil joining the ranks. Now the decision falls on lawmakers and presidency, the nation balancing the pros and cons of Bitcoin adoption as a financial asset.
