Brazil's Congress Advances Bill 4212/25 to Restrict CBDC Powers

Brazil's Congress advanced Bill 4212/25 through the Economic Development Committee of the Chamber of Deputies, establishing restrictions on central bank digital currency powers to protect economic freedom, privacy, and citizens' security. Deputy Bia Kicis originally introduced the bill, which rapporteur Lafayette de Andrada modified to limit the Central Bank of Brazil and financial institutions from using a future CBDC as an instrument of political or ideological surveillance. The legislative action comes as the Central Bank of Brazil reassesses its drex CBDC project after significantly reducing its reach due to privacy concerns.

Bill 4212/25 Establishes CBDC Restrictions

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. Deputy Bia Kicis stated 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.

Fifth Article Mandates Financial Inclusion Protections

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." The provision addresses 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.

Bill Requires Chamber and Presidential Approval

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.

FAQ

What restrictions does Bill 4212/25 place on Brazil's CBDC?

Bill 4212/25 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.

What does the fifth article of Bill 4212/25 require regarding financial inclusion?

The fifth article mandates 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."

What approval does Bill 4212/25 still require?

The project still has to be approved by both chambers and obtain presidential sanction before becoming law.