What To Know:
- Brazil’s Congress is reviewing a bill to build a sovereign Bitcoin reserve of 1 million BTC over five years.
- The proposal includes tax payments in Bitcoin, incentives for mining firms, and protections for self-custody rights.
- If approved, Brazil could become one of the largest state holders of Bitcoin, potentially influencing global market dynamics.
Brazil’s lawmakers are reviewing a proposal to create a Strategic Bitcoin Reserve that could place the country among the world’s largest sovereign holders of Bitcoin. A bill submitted to the National Congress calls for the creation of a “Strategic Sovereign Bitcoin Reserve,” known as RESBit, with a target of accumulating at least one million BTC over the next five years.
The proposal, which was formally introduced in the Chamber of Deputies, sets out a plan for gradual and structured purchases of Bitcoin as a strategic national asset. It significantly expands earlier drafts that suggested allocating up to 5% of Brazil’s foreign exchange reserves to crypto assets. The updated version widens the scope and scale, and aims to embed Bitcoin more deeply into the country’s financial strategy.
Brazil Proposes Strategic Bitcoin Reserve
Under the bill, the Brazilian Treasury would manage the reserve, with assets stored using secure custody systems such as cold wallets and multi-signature protocols. Supporters argue that this structure would help safeguard the holdings while aligning them with modern standards of digital asset security.
The measure goes beyond reserve accumulation. It includes provisions that would allow federal taxes to be paid in Bitcoin, exempt Bitcoin transactions from capital gains tax, and strengthen the legal rights of individuals and firms to self-custody their digital assets. It also proposes the repeal of Federal Tax Regulation No. 1888/19, a move that would simplify the current compliance framework for crypto users in Brazil.
Another key element is a prohibition on the sale of Bitcoin seized by judicial authorities. Instead, confiscated digital assets would be absorbed into the national reserve. The draft also outlines incentives for companies engaged in Bitcoin mining and long-term holding, thus, signaling a policy shift toward encouraging domestic participation in the crypto sector.
The proposal is currently under review by the House Committee on Economic Development. Rapporteur Congressman Luiz Gastão has argued that Bitcoin could serve as a long-term hedge for Brazil’s public finances, and described it as an asset resistant to inflation and insulated from third-party seizure. According to the draft, the reserve could strengthen the country’s ability to manage debt and also diversify its treasury holdings.
If the plan is implemented fully, Brazil’s Bitcoin reserve would exceed those of major global economies such as the US and China. Analysts estimate that acquiring one million BTC over five years could require spending close to $68 billion at current market prices. This would be achieved even though the final cost would depend on price movements during the acquisition period.
The proposal still faces regulatory hiccups. Brazil’s central bank does not currently recognize Bitcoin as a reserve asset within its existing framework. Any move to adopt RESBit would therefore require adjustments to monetary policy rules and regulatory definitions, a process that could prove complex and politically sensitive.
Market pundits are already assessing the potential impact. Large-scale sovereign purchases could tighten available supply and influence global Bitcoin pricing. Some analysts warn that steady government accumulation may introduce new dynamics to market liquidity and volatility, particularly if other countries follow a similar path.
Public reaction has been mixed. Supporters view the plan as a progressive move that will place Brazil at the forefront of financial innovation. Critics point to price volatility and regulatory uncertainty as key risks. The debate has intensified discussions around crypto policy, both within Brazil and across emerging markets.
The legislative process is still in its early stages. The bill must pass through multiple committees before it reaches a full vote in Congress.
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