Brazil’s Congress Moves To Limit State Control Over CBDCs
A bill that seeks to reduce the powers of the Brazilian state if a central bank digital currency ( CBDC) is approved passed the Economic Development Committee of the Chamber of Deputies in a revised form.
The project, based on Bill 4212/25, originally introduced by Deputy Bia Kicis and modified by rapporteur Lafayette de Andrada, seeks to limit the powers of the Central Bank of Brazil and other financial institutions linked to a future CBDC to protect economic freedom, privacy, and citizens’ security.
The law establishes that a digital currency issued by the central bank cannot substitute for paper money, cannot be forced as legal tender, and cannot be used as an instrument of political or ideological surveillance.
Furthermore, in its fifth article, the legislator stresses that governing bodies must ensure that “digital currency does not result in financial exclusion, always guaranteeing alternatives accessible to the population without access to digital media.”
Bicis states that while the creation of an official digital currency, like Brazil’s drex, “can bring important benefits, but it also raises legitimate concerns regarding privacy, individual freedom, and the security of citizens,” explaining that international experiences indicate these can be used for mass surveillance and transaction monitoring.
The project comes at a time when the central bank is reassessing the reach of its drex CBDC project, whose reach was significantly reduced due to privacy concerns. Nonetheless, there are still concerns about the effects of full adoption of a digital currency and the problems it would cause for less tech-savvy citizens who rely on cash for their day-to-day expenses.
While the project still has to be approved by both chambers and obtain presidential sanction, its advance shows that there is real interest in establishing controls over a hypothetical CBDC and its contentious use by the Brazilian government.
