Brazil is Considering Creating a Strategic Bitcoin Reserve and Buying One Million Coins.. Will the Price Rise?

The Brazilian Congress has reintroduced Bill No. 4501 of 2024, which proposes purchasing up to one million Bitcoin to establish a national strategic cryptocurrency reserve.

The bill significantly expands on the previous proposal, stating that the #عاجل.. RESbit( Strategic Bitcoin Sovereign Reserve Fund will be responsible for accumulating the coins over five years, according to Cryptopolitan.

Initially, the bill suggested allocating up to 5% of Brazil's foreign exchange reserves to diversify the national treasury's assets through an asset viewed as a hedge against inflation and protected from confiscation. The Central Bank would manage this reserve within the framework of the national treasury.

The bill also includes a package of amendments, such as incentivizing companies to hold and mine Bitcoin, allowing federal taxes to be paid using cryptocurrency, and banning the sale of Bitcoin confiscated by judicial authorities.

Luis Gasta, a federal representative from Ceará, said that the project could require at least $68 billion to implement the plan to buy one million Bitcoin, if the relevant committees approve it and it is finally ratified by Congress. If executed, Brazil's Bitcoin holdings could surpass reserves of major countries like the United States and China.

Gasta emphasized that the project includes guarantees for fundamental rights related to the use of crypto assets, including the right to self-custody, freedom to transfer assets, and transaction confidentiality, except in cases where explicit permission or a specific judicial order is issued.

He pointed out that these guarantees are essential to foster an innovative investment environment and establish legal certainty, affirming that protecting individuals' independence in the digital environment aligns with the goals of safeguarding public funds and enhancing citizens' purchasing power.

The project is not limited to direct Bitcoin purchases but also offers other accumulation methods, such as collecting taxes paid in cryptocurrency, temporarily holding shares of Bitcoin-backed spot ETFs in emergencies, and storing through state-owned companies.

Some experts believe that implementing the plan to buy one million Bitcoin could support the cryptocurrency's prices, especially considering the decline it has experienced since the beginning of the year.