Bitcoin News Today: Bitcoin's Volatility Sparks Debate as Brazil Weighs $19B Crypto Reserve

Brazil’s Congress is advancing legislation to allocate up to 5% of the country’s $344 billion international reserves into bitcoin, with the proposal now in committee review following a public hearing in Brasília. Introduced by Federal Deputy Eros Biondini, the bill aims to diversify Brazil’s reserve assets, hedge against currency and geopolitical risks, and position the country as a leader in digital asset innovation [1]. If approved, the Central Bank of Brazil and the Ministry of Finance would jointly manage the reserve, with biannual reports to Congress on performance and risk exposure [1].

The proposal has drawn support from several lawmakers and industry stakeholders, who argue that bitcoin serves as a digital equivalent to gold and a potential tool for reinforcing Brazil’s financial sovereignty. Deputy Luiz Philippe de Orléans e Bragança, who hosted the hearing, emphasized that bitcoin is becoming institutionalized and that major banks and sovereign wealth funds are already adopting it [1]. Pedro Henrique Guerra, chief of staff to Vice President Geraldo Alckmin, described the integration of bitcoin-backed Treasury bonds and long-term investment strategies as a “revolution in public finances” [1]. Industry representatives, including Diego Kolling of Méliuz and Julia Rosin of Bitso Brasil, highlighted bitcoin’s scarcity and decentralization as potential long-term benefits for Brazil’s treasury [3].

However, the Central Bank and government representatives have raised significant concerns. Luis Guilherme Siciliano, head of the Department of International Reserves at the Central Bank, argued that bitcoin is too volatile to serve as a reserve asset and that its role in periods of market stress could undermine financial stability. Daniel Leal from the Ministry of Finance echoed these concerns, noting that while bitcoin has gained relevance, it does not align with the conservative nature of international reserves [1]. The Central Bank has also pointed out that bitcoin is classified by the IMF as a non-financial asset, which further complicates its inclusion in a reserve portfolio [2].

Despite these objections, proponents of the bill remain optimistic. Bernardo Srur, CEO of ABCripto, a cryptocurrency advocacy group, stated that even if the initiative does not pass, it is a valuable step in educating policymakers and aligning Brazil with global trends. Julia Rosin added that ignoring the movement toward integrating bitcoin into public finances could represent a missed strategic opportunity, particularly as the U.S. and other countries continue to explore similar policies [1].

The bill, known as RESBit (Bill 4501/2024), must now navigate a multi-committee review process, including the Economic Development Commission, the Science, Technology, and Innovation Committee, the Finance and Taxation Committee, and the Constitution, Justice, and Citizenship Committee, before advancing to the Senate [3]. Critics argue that diverting nearly $19 billion into a volatile asset could restrict funding for infrastructure and social programs and expose public finances to market swings [3]. Others have raised concerns about transparency and accountability, stressing the need for robust reporting and oversight mechanisms if the reserve moves forward.

With Brazil already leading Latin America in crypto adoption and ranking 10th globally in Chainalysis’ 2024 report, the proposal reflects a broader regional and global shift in how governments view digital assets. Countries like El Salvador, the U.S., China, and Dubai have all explored or implemented sovereign-level bitcoin holdings, signaling a potential reconfiguration of international financial systems [3]. Brazil’s decision could further accelerate this trend and set a precedent for emerging economies seeking to diversify their reserves in the digital age.

Source:

[1] Brazil's Congress Explores A Bitcoin Strategic Reserve (https://www.forbes.com/sites/astanley/2025/08/24/brazils-congress-explores-a-bitcoin-strategic-reserve/)

[2] Bitcoin Deemed Too Risky for National Reserves by ... (https://www.cointribune.com/en/bitcoin-judged-too-risky-for-national-reserves-according-to-the-central-bank-of-brazil/)

[3] Brazil Debates Massive $19B Strategic Bitcoin Reserve (https://cryptonews.com/news/brazil-debates-massive-19b-strategic-bitcoin-reserve-will-it-challenge-dollar-dominance/)

[4] Brazilian lawmakers propose allocating 5% of foreign ... (https://www.chaincatcher.com/en/article/2199070)