However, the law must be approved by the president of Brazil for it to be enacted.
Brazil is one step away from legalising Bitcoin
The newly approved document includes provisions to identify virtual currencies as a legal form of payment in the region.
The document also proposes to accept air mileage programmes in the "definition of payment arrangements" under the supervision of the Central Bank of Brazil.
The law has been approved by the Chamber of Deputies but is still awaiting authorization from the president for it to be enacted.
Once the official approval has been given, the law will then be incorporated into the legal framework of Brazil.
Apart from legalising Bitcoin, the new law also introduces provisions to help create licences for crypto exchange platforms in Brazil, as well as develop a robust framework for crypto custody management by dependable third-party vendors in the country.
Furthermore, the new law will also emphasise the factor of transparency by compelling exchanges to declare the number of funds that they hold in order to avoid another crypto fiasco like the FTX collapse taking place in the country.
Brazil's relationship with crypto
Brazil offers the largest number of crypto ETFs in the region as compared to other Latin American countries and has also been one of the first few regions to embrace cryptocurrencies holistically.
Most Brazilian banks provide some form of crypto service to their customers and have made significant progress in educating their citizens about the use of cryptocurrencies in general.
For more articles like this, take a look at our Planet Crypto page.