The Senate of Brazil took the first steps towards cryptocurrency adoption with the unanimous approval of a bill to regulate digital assets. If approved, Brazil would become the largest Latin American nation to regulate cryptocurrencies.

The bill would provide the framework for how cryptocurrency can be accepted and used as a day-to-day payment option.

The Senate Economic Affairs Committee approved Senator Flavio Arns’ proposal, which seeks to give a joint vision to the Central Bank of Brazil and the National Tax Authorities.

Two competing bills presented by Senators Styvenson Valentim and Soraya Thronicke were shelved.

The bill defines virtual assets and classifies their service providers, giving the federal government authority to determine which body will be responsible for regulating the business.

Senator Iraja Abreu, who wrote the draft, told Bloomberg that Brazil’s Central Bank had a hand in building the project.

“With regulation, cryptocurrency will become even more popular,” said Abreu. “Once this regulation is approved, the tendency is for it to be increasingly adopted in the supermarket, in the commerce, in the dealership.”

Under the bill, cryptocurrency providers must prevent money laundering and asset concealment, while fighting criminal organizations, the financing of terrorism and the proliferation of weapons of mass destruction. The bill proposes a fine or imprisonment for violations.

40% of cryptocurrency holders in Brazil earn less than minimum wage

Cryptocurrency adoption is expanding dramatically in Brazil, especially among the less wealthy. São Paulo School of Business Administration claims that 40% of holders earn less than the country’s minimum wage.

Brazil will launch its pilot program for a national digital currency in September, before going public in 2024.

Last year, Roberto Campos Neto of the central bank said that cryptocurrency purchases are affecting Brazil’s import numbers.

“[Crypto] it is already starting to affect even the national accounts, which means that it has become a relevant investment instrument”, he told local media Estadão.

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The bill must now be voted on by the entire Senate, followed by the Chamber of Deputies. If approved, President Jair Bolsonaro will sign the law.

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