The first Banco do Brasil, founded October 12, 1808 by then Prince Regent Dom João de Bragança, future King Dom João VI of Portugal, was the first bank in Imperial Portuguese territory. It functioned as a mixed central bank, with deposits, allowances, and issuances. It also sold products monopolized by the Portuguese Crown, such as Brazilwood and diamonds.
Initially located on Rua Direita on the corner of São Pedro street, it was the fourth issuing bank in the world at the time, after the Bank of Sweden (1668), the Bank of England (1694), and the Bank of France (1800), and its objective was to create manufacturing industries in Brazil. However, it was forced to issue convertible paper currency without enough gold to back it in order to provide for the Royal Family’s costs for the return of Dom João VI and his entourage to Portugal, as well as for the costs of Independence. It eventually defaulted on its payments and was accused of contributing to the poor financial situation of the country. On September 23, 1829, a law was passed ordering the liquidation of the first Banco do Brasil.