In a groundbreaking development, Rubens Sardenberg, Chief Economist of the Brazilian Federation of Banks (FEBRABAN), urged the allocation of a portion of Brazil’s $343.95 billion foreign exchange reserves to Bitcoin during the country’s historic public hearing on a Strategic Bitcoin Reserve on August 20, 2025. Speaking at the Chamber of Deputies in Brasília, Sardenberg’s endorsement of Bill 4501/2024, which proposes allocating up to 5% (approximately $17.2 billion to $19 billion) of Brazil’s reserves to Bitcoin, has sent shockwaves through the crypto community, with social media posts on X proclaiming, “IT’S HAPPENING!!!”
This marks a significant shift, as FEBRABAN, representing Brazil’s banking sector, adds institutional weight to the push for a national Bitcoin reserve. Below, we explore Sardenberg’s remarks, the context of the hearing, and the potential impact on Bitcoin and global cryptocurrency adoption.
Sardenberg’s Call for Bitcoin Allocation
During the August 20, 2025, hearing hosted by the Economic Development Committee, Rubens Sardenberg, FEBRABAN’s Chief Economist, advocated for integrating Bitcoin into Brazil’s foreign reserves as a strategic diversification move. His key points, as reported by sources like Livecoins and CoinSpeaker, include:
- Strategic Diversification: Sardenberg argued that allocating a portion of Brazil’s reserves to Bitcoin could hedge against currency fluctuations and geopolitical risks, complementing traditional assets like gold and U.S. dollars.
- Economic Innovation: He highlighted Bitcoin’s potential to modernize Brazil’s financial strategy, aligning with the country’s robust crypto infrastructure, including spot ETFs like FOMO11 and HASH11.
- Balanced Approach: While acknowledging Bitcoin’s volatility, Sardenberg emphasized that a modest allocation (up to 5%) could mitigate risks while positioning Brazil as a leader in the digital economy.
Sardenberg’s stance contrasts with skepticism from Central Bank official Nilton José Schneider David, who cited volatility concerns, but aligns with supportive remarks from Pedro Giocondo Guerra, chief of staff to Vice President Geraldo Alckmin, who called Bitcoin “digital gold.” The hearing, attended by stakeholders like Diego Kolling (Méliuz) and Julia Rosim (ABcripto), underscored Brazil’s serious consideration of the proposal.
Context of Bill 4501/2024 and the Hearing
Introduced by Federal Deputy Eros Biondini in November 2024, Bill 4501/2024 proposes creating a “Sovereign Strategic Bitcoin Reserve” (RESBit) managed by the Central Bank of Brazil and the Ministry of Finance. Key details include:
- Allocation Size: Up to 5% of Brazil’s $343.95 billion foreign reserves, equating to $17.2 billion to $19 billion, to be gradually acquired and stored in secure cold wallets.
- Objectives: Diversify treasury assets, protect against exchange rate volatility, promote blockchain technology, and support Brazil’s digital currency, Drex.
- Legislative Process: The bill must pass four additional committees (Science, Technology and Innovation; Finance and Taxation; Constitution, Justice, and Citizenship) before a full Chamber vote, Senate review, and potential approval by President Luiz Inácio “Lula” da Silva.
The August 20 hearing, requested by Deputy Luiz Philippe de Orleans e Bragança, was the first formal discussion on the bill, following months of debate sparked by Guerra’s March 2025 remarks that a Bitcoin reserve is “crucial for Brazil’s prosperity.” Brazil’s advanced crypto ecosystem, with $90.3 billion in transactions in 2024 and a 10th-place global ranking per Chainalysis, supports the proposal’s feasibility.
Why Sardenberg’s Endorsement Matters
Sardenberg’s call, as a representative of FEBRABAN, carries significant weight:
- Banking Sector Support: FEBRABAN’s endorsement signals growing acceptance among Brazil’s financial institutions, potentially encouraging banks to engage with crypto services, as enabled by recent U.S. Federal Reserve frameworks.
- Market Impact: A $19 billion allocation could drive substantial demand against Bitcoin’s 450 daily issuance post-2024 halving, supporting forecasts like Brian Armstrong’s $1 million by 2030.
- Global Influence: Brazil’s move could inspire other nations, following El Salvador’s 5,921 BTC reserve and Bhutan’s 13,000 BTC, as hinted by Eric Trump’s comments on a global Bitcoin “race.”
- Economic Strategy: As Brazil faces inflation and currency volatility, Bitcoin’s role as a hedge aligns with Sardenberg’s diversification argument, potentially reshaping reserve management.
Social media reactions on X, such as “BANKING FEDERATION CHIEF ECONOMIST JUST URGED TO ALLOCATE BRAZILIAN RESERVES IN #BITCOIN,” reflect widespread excitement, with thousands of views and comments.
Current Market Context
As of August 21, 2025, Bitcoin is trading at $113,846, down 1.9% in the last 24 hours but up significantly year-to-date. The market is supported by:
- Institutional Adoption: Moves like the New York State Common Retirement Fund’s 143% Bitcoin exposure increase and Goldman Sachs’ $1.558 billion in ETF holdings.
- Regulatory Progress: The U.S. Digital Asset Market Clarity Act’s expected 2025 passage and Brazil’s reserve hearing.
- Global Trends: Buenos Aires accepting crypto for taxes and corporate adoptions like Goobit Group’s 10.63 BTC purchase.
The FOMC minutes, released on August 20, 2025, showed a dovish tilt, increasing expectations for a September rate cut, which could boost risk assets like Bitcoin.
Implications for Investors
Sardenberg’s endorsement offers key insights for crypto investors:
- Bullish Catalyst: A potential $19 billion Bitcoin reserve could significantly drive prices, supporting bullish forecasts like $180,000-$200,000 by year-end.
- Volatility Risks: Short-term price swings may occur as Brazil’s legislative process unfolds. Monitor committee votes and Senate progress.
- Secure Strategies: Use regulated platforms like Coinbase, Kraken, or ETFs like BlackRock’s IBIT, and store assets in hardware wallets.
- Global Momentum: Track sovereign adoption trends, as Brazil’s move could spur similar actions elsewhere.
Final Thoughts: Brazil’s Bitcoin Reserve Push Gains Momentum
Rubens Sardenberg’s call to allocate Brazilian reserves to Bitcoin, backed by FEBRABAN, marks a historic milestone in the nation’s journey toward cryptocurrency adoption. As Brazil debates a $19 billion Strategic Bitcoin Reserve, the endorsement from a key banking figure amplifies the proposal’s credibility. With global adoption accelerating— from U.S. regulatory progress to El Salvador’s Bitcoin reserves—Brazil’s move could reshape the crypto landscape.
As the crypto community celebrates with “IT’S HAPPENING!!!,” investors should stay vigilant, tracking Brazil’s legislative developments and global trends. Stay tuned for updates on Bill 4501/2024, Bitcoin price reactions, and more crypto insights as this transformative story unfolds.
Disclaimer: This article is for informational purposes only and not financial advice. Cryptocurrency investments carry risks.