The upper house of the National Congress of Brazil – the Federal Senate – reportedly approved the bill that could serve as a regulatory framework for the local cryptocurrency industry. The legislation needs to receive a green light from the Chamber of Deputies before becoming live.

Senate Said ‘Yes’

The largest nation in South America is gradually moving towards establishing rules on its digital asset ecosystem. A local report reads that the Senate passed a bill to set up a comprehensive regulatory framework on dealings with bitcoin and altcoins.

The Senate’s proposal defined a “virtual asset” as the “digital representation of value that can be traded or transferred electronically, including making payments and investments.” According to the bill, local cryptocurrency providers should only be able to operate in Brazil and will have to obtain a license from a Federal Public Administration body or entity.

In turn, the government is yet to decide whether additional amendments should be added to the bill. Brazil’s lawmakers will also define which Federal organization will serve as a top financial watchdog to oversee the cryptocurrency providers.

The proposal now needs the approval of the Chamber of Deputies (the lower house of the National Congress) and the signature of President Jair Bolsonaro to become effective.

Brazil: the Global Leader in Crypto Adoption

Earlier this year, the US-based cryptocurrency platform Gemini interviewed approximately 30,000 people across 20 countries to find out which nations are the most inclined toward digital assets. Per the result, Brazil and Indonesia shared the first place as 41% of the surveyed from both states admitted being HODLers.

Those who swapped fiat currencies for bitcoin or altcoins said their driving motive to do it is because they believe in crypto’s long-term investment potential.

Another top reason was purchasing digital assets as a hedge against the surging inflation. Brazil’s current inflation rate is over 10% as petrol prices, for example, have soared by nearly 50% since 2021.

It is also worth mentioning that nearly half of all questioned crypto holders in the Latin American region (where Brazil is located) entered the market for the first time last year.