$18 billion BTC reserve? Brazil moves to build digital economy
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$18 billion BTC reserve? Brazil moves to build digital economy
The bill aims to "modernize Brazil's technological and financial management" and strives to enhance competitiveness in the global digital economy.
Navigating Web3 tides with focused insightsSource: cryptoslate
Translation: Blockchain Knight
Brazilian legislator Eros Biondini recently proposed the creation of a BTC sovereign strategic reserve (RESBit), allocating up to $18.6 billion—equivalent to 5% of Brazil's international reserves as of September.
According to the bill, RESBit will diversify the Brazilian treasury’s assets, protect international reserves from exchange rate fluctuations and geopolitical risks, and support the central bank’s digital currency, Drex.
The bill aims to "modernize Brazil’s technological and financial management" and enhance competitiveness in the global digital economy.
RESBit notes that many countries incorporating blockchain technology into national financial management have already achieved success, such as El Salvador, U.S. ETF approvals, China's digital yuan, Dubai becoming a crypto asset hub, and the EU’s MiCA regulation.
The report also highlights that despite high volatility, crypto assets have emerged as a viable asset class in recent years, especially after reaching a record market cap of $3.5 trillion.
"Despite instability, data indicates that crypto assets are solidifying their status as a legitimate asset class. Nations strategically integrating them into their economies will gain significant benefits in the medium to long term."
Under the proposal, the Central Bank of Brazil and the Ministry of Finance would be responsible for holding BTC and required to submit reports every six months on RESBit’s acquisition, performance, security, and risk assessment.
In addition to diversifying the nation’s international reserves, the bill also emphasizes promoting research and development related to blockchain technology.
Educational initiatives include training public agencies to implement the RESBit program, establishing graduate programs related to blockchain, crypto assets, and cybersecurity at public educational institutions, and incentivizing startups to develop projects tied to crypto assets.
Biondini stated: "The establishment of RESBit is a strategic move that positions Brazil at the forefront of the new digital economy, reducing economic risks while expanding technological and financial development opportunities."
According to Chainalysis’ latest report, Brazil ranks 10th globally in the Crypto Adoption Index and received the second-largest volume of crypto assets between 2022 and 2023.
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