Welcome to Latam Insights Encore. This dives deep into Latin America’s most relevant economic and crypto news last week. This edition examines the failed attitude of the Brazilian Central Bank on Bitcoin and how Brazil can hamper the pioneer of LATAM’s BTC reserve.
Latam Insights Encore: Brazil’s Central Bank cannot accept Bitcoin
While Bitcoin has become one of the hottest assets this year, influenced by President Trump’s embrace and ongoing regulatory efforts, central banks are still wary of recognizing Bitcoin as one of the most powerful reserve assets ever created.
The Brazilian Central Bank has enacted regulations that open up the creation of a strategic Bitcoin Reserve, with a once-in-a-lifetime opportunity to support the initiative that will guide Brazil to become a regional powerhouse. Instead, they were unable to recognize the benefits that investment in Bitcoin may bring to the country, and decided to go against the measure.
At a recent parliamentary hearing discussing a bill that would invest up to 5% of Brazil’s foreign reserves in Bitcoin, bank representatives emphasized that cryptocurrencies were “treated as a capital instrument, not a financial instrument or a reserve asset.” He also took the opposite stance, stressing that acquiring Bitcoin “increases risks” associated with these reserves, according to internal research.
While this is just the first step in the legislative journey, the central bank’s position may shake up representatives and senators’ support of the bill.
Nevertheless, he hopes that educated lawmakers can study Bitcoin and learn about the properties that make it an ideal reserve asset.
Lawmakers must overcome this central bank leadership and charge behind the bill. The bill will clearly bring progress and income to Brazilians. Otherwise, there will be another fumble on that record.
Read more: Brazil’s Central Bank rejects implementation of strategic Bitcoin Reserve
