Brazil passes Bitcoin reserve bill: up to 5% of forex reserves to buy BTC, likely to set a precedent among G20 countries.

Brazil's House of Representatives is pushing a bill to use up to 5% of foreign exchange reserves to buy bitcoin, which if successful will be the first of its kind in the G20 and may reshape the thinking of global central banks on asset allocation. (Synopsis: Legendary investor Paul Tudor Jones: Buy bitcoin, gold and stocks, fight against the dollar's 10% decline in the next 1 year) (Background supplement: Michael Sellor on "all in bitcoin" decision: COVID-19 made it clear to me that the dollar and gold are fake) Brazil's Congress is discussing a new bill to formally incorporate bitcoin into the country's financial framework. If passed, Brazil could invest up to 5% of its foreign exchange reserves in bitcoin, a size of about $18.5 billion, or become the first G20 member to pass legislation to include bitcoin in the national reserve. According to official details, the bill code PL 4501/2024 will establish the Strategic Sovereign Bitcoin Reserve (RESBit). The provisions authorize the central bank and the Ministry of Finance to allocate bitcoin in the 0–5% range and not use it for five years after the purchase, unless specifically approved by Congress. To reduce technical risks, the draft calls for cold wallet custody, an independent audit every six months, and the addition of AI to monitor abnormal transactions. Coindoo pointed out that the bill has passed the first committee of the House of Representatives, and then needs to be voted by the full House, approved by the Senate, and then signed by the president before it can officially enter into force. Legislative Path and Risk Management Has it been mentioned whether this is following the example of El Salvador? Proponents cut the model away from El Salvador's purely executive order approach: this is not El Salvador 2.0, but a more robust institutional framework. However, volatility remains the biggest concern. Critics argue that high volatility conflicts with the central bank's three principles of "safety, liquidity, and yield." In addition, the International Monetary Fund (IMF) has opposed El Salvador's Bitcoin fiat currency program in the past. If Brazil uses foreign exchange to buy currency, will the IMF put pressure again? At the same time, the central bank must also ensure the security of wallets, train personnel and open buying mechanisms to gain market trust. Success will be the first of its kind in G20 countries Brazil currently has foreign exchange deposits of about $370 billion, the largest in Latin America. Once 5% of this is used, it will lead to significant long-term buying. According to Chainalysis, this could launch a "sovereign bitcoin phase 2.0", driving countries such as Argentina, Indonesia... and other emerging markets are also re-examining their foreign exchange deposit strategies, and other central banks will face policy discussions on whether to diversify their US dollar positions. Market and international pressures Asset managers speculate that if Brazil does continue to move forward with its bitcoin reserve program, international institutional ratings and lending conditions may be under pressure in the short term, but the long-term effect depends on price action and regulatory transparency. Critics warn that "bitcoin lacks precedent as a sovereign asset, and even if the bill passes, the details of its implementation will still test the central bank's ability." After all, if you are accidentally hacked, it is a national joke. The Brazilian legislation has accelerated Bitcoin's attempt to enter the balance sheets of central banks. Whether Brazil will open this door will be decided in the next congressional table, which will also bring new options and challenges to global central banks. Related reports Investment institution F Street announces fixed investment to buy $10 million in Bitcoin: fight inflation, strengthen capital Arthur Hayes: Bank of Japan "needs conditional interest rate hikes" or restart QE: Bitcoin, risk assets will skyrocket Micro strategy chokes back "Bitcoin quantum attack", Michael Saylor: Unfounded worry, if it comes true, Google and Microsoft will fall first [Brazil passes the draft of bitcoin reserves: invest up to 5% foreign exchange to buy BTC, This article is expected to become a precedent for G20 countries" was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".