The Brazilian Senate passed a bill on Tuesday that will introduce "virtual service providers" to regulate crypto transactions in the country.
The bill, which was introduced by Senator Flavio Arns, is now on its way to the Brazilian Chamber of Deputies, where it will be voted on. The executive branch will have the power to veto the measure if it is passed.
At the same time, the executive branch will be able to decide which regulatory bodies would be in charge of overseeing crypto service providers.
According to Irajá Abreu, the bill's rapporteur, the country's Central Bank will most likely be in charge of crypto regulation.
"We pushed the report's talks so that we could finally vote here today on this incredibly important and urgent topic of regulation of crypto assets, which some refer to as cryptocurrencies," Abreu added.
The bill, which incorporates elements from three other Brazilian Congress bills, might pave the way for a more comprehensive regulatory structure.
With the industry's rapid growth, the need for crypto laws has grown more apparent. Given that Brazil is Latin America's largest market, such legislation would be critical.
According to Chainalysis, Brazil recorded a crypto transaction volume of roughly $91 billion between June 2020 and July 2021.
Customers' data and funds will be protected under the legislation, which will be enforced by crypto service providers. Anti-money laundering procedures will also be included in the standard standards.