After months of anticipation, Brazil has finally passed a bill establishing the country’s crypto framework. Before President Jair Bolsonaro puts the bill into law, it must be approved by the Chamber of Deputies. By the end of 2022, it is expected to be operational.

The most populous country in South America is progressively building laws for its digital asset ecosystem. According to a local newspaper, the Senate passed a bill to provide a complete regulatory framework for bitcoin and altcoin transactions.

A “virtual asset,” according to the Senate bill, is a “digital representation of value that can be traded or transferred electronically, including payments and investments.”

Local cryptocurrency providers should only be authorized to operate in the country, according to the bill, and will be required to seek a license from a Federal Public Administration body or entity.

As a result, the administration has yet to decide if more amendments to the bill should be made. The bill, which was first introduced in 2015, allows Brazil’s executive branch to create virtual asset restrictions. The bill still needs to establish whether the industry will be regulated by Brazil’s central bank, the Securities and Exchange Commission, or a brand-new organization.

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To take effect, the plan must be approved by the Chamber of Deputies (the lower chamber of the National Congress) and signed by President Jair Bolsonaro.

According to observers, if the bill passes, the country’s economy will be the largest in Latin America, with a legislative framework for virtual assets.

Despite the fact that El Salvador made Bitcoin legal money last year and Cuba regulates cryptocurrencies as a payment mechanism, Brazil’s population and economy will make it one of the first countries to implement cryptocurrency regulation.

Brazilians gained $2.56 billion from cryptocurrencies in 2021, according to Chainalysis.

The country is also encouraging cryptocurrency mining by exempting ASIC mining rigs from import taxes.

Gemini, a cryptocurrency exchange based in the United States, conducted a survey of 30,000 people in 20 countries earlier this year to determine which countries are most receptive to digital assets. According to the findings, Brazil and Indonesia tied for first place, with 41 percent of those polled in both countries admitting to being HODLers.

Those who exchanged fiat currency for bitcoin or altcoins indicated they did so because they trust in the long-term financial potential of crypto.

Buying digital assets as a hedge against rising inflation was another popular rationale. Brazil’s current inflation rate is over 10%, with gasoline prices, for example, having increased by about 50% since 2021.

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