Brazil Congress Considers Bitcoin Reserve Amid Central Bank Rejection

Brazil's Congress is considering legislation that would allow up to 5% of the country's $344 billion international reserves to be allocated into bitcoin, aiming to diversify assets, hedge against risks, and position Brazil as a leader in digital asset innovation. Supporters, including Federal Deputy Eros Biondini and government officials like Pedro Henrique Guerra, argue that bitcoin could serve as a digital equivalent to gold and revolutionize public finances through long-term investment strategies. However, the Central Bank of Brazil has firmly rejected the proposal, citing bitcoin's high volatility, classification as a non-financial asset by the IMF, and the associated risks to financial stability. Central Bank representatives emphasize that bitcoin does not meet the criteria necessary for reserve assets and warn that its inclusion could undermine the predictability and stability required for managing national reserves. Despite the Central Bank's cautious stance, the bill has advanced to committee review, and lawmakers continue to debate the balance between innovation and risk. This debate reflects a broader global trend where some countries explore integrating digital assets into official reserves, while others prioritize financial stability over speculative opportunities.