Welcome to Latam Insights, a compilation of the most relevant crypto news from Latin America over the past week. In this week’s edition, the Brazilian Congress prepares to discuss a Strategic Bitcoin Reserve bill, El Salvador passes a bitcoin-friendly investment bank law, and the Brazilian CBDC drops its bitcoin element.
Brazilian Lawmakers to Discuss Strategic Bitcoin Reserve Bill
Brazil could become one of the first nations to explicitly pass a regulation promoting the establishment of a national bitcoin reserve. The lower chamber of the Brazilian Congress will discuss Bill 4501/2024, titled “Provides for the formation of a Sovereign Strategic Reserve of Bitcoins by the Federal Government and provides other measures” on August 20, after having been discussed and approved by different committees before.
The project, originally introduced in November, aims to put Brazil ahead in Latin America by laying the groundwork for a central bank-managed bitcoin reserve, which would be funded with part of the country’s foreign reserves. 5% of these reserves could be invested in BTC, totaling nearly $16.5 billion, according to central bank numbers in January.
The primary justification for this move is the diversification of Brazilian reserves, reducing exposure to exchange rate fluctuations and geopolitical risks, and increasing the economic resilience of the country’s finances.
New Investment Bank Law in El Salvador Opens Doors to Bitcoin Products
The newly approved Investment Bank Law aims to turn El Salvador into a fintech hub in Latin America, including bitcoin and crypto assets as a relevant part of this future. The law, passed by the National Assembly on August 7, recognizes investment banks as different structures compared to standard banks and allows them to offer more tools, like bitcoin and crypto assets, to entice “sophisticated investors.”
These institutions, which will need to have a capital of at least $50 million, will cater to this kind of investor, who will have to be certified as having financial market knowledge and possessing at least $250,000 to operate.
The new investment banks will accommodate several use cases, encompassing fundraising processes, offering credit and financing opportunities, organizing foreign exchange operations, and establishing guarantees, among other complementary services.
Brazilian Drex CBDC Drops Blockchain to Launch Next Year
The Central Bank of Brazil aims to accelerate the development of a central bank digital currency to deliver a working solution as soon as possible. According to local media reports, drex, the Brazilian Central Bank Digital Currency (CBDC), will abandon most of its tokenization and blockchain elements, targeting a launch date in 2026.
Fabio Araujo, coordinator of the drex project at the central bank, confirmed this change, stating that the new proposal will be delivered in two phases: the first phase will not include a decentralized aspect, with an expected launch next year, and the second phase will continue to implement and mature blockchain technologies.
Author: Sergio Goschenko
Source: Bitcoin
Reviewed By: Editorial Team
