Paraguay moves one step closer to digital currency regulation

A bill seeking to regulate the local cryptocurrency industry has now officially passed the Senate of Paraguay.

Crypto Bill Approval

Last December 17, the Senate of Paraguay approved a bill on cryptocurrency. The provisions, which define several key terms, will now be sent to the Deputy Chamber for further deliberation. This includes virtual assets and calls for licenses to mine cryptocurrencies.

Senator Fernando Silva Facetti, the bill’s sponsor, revealed it has been passed in the Paraguayan Senate after a controversial debate. According to the senator, the law also aims to promote the growth of crypto mining activities by leveraging the surplus of electricity generated in the country.

The enactment of the legislation includes a definition of virtual assets, tokens, cryptocurrency mining and VASPs (virtual asset service providers). It also empowers the Ministry of Industry and Trade to request assistance from government agencies outside its borders to implement the law. This bill explicitly states that mining cryptocurrencies is a legal activity, noting that:

“Virtual asset mining is a digital and innovative industry. This industry will benefit from all the incentive mechanisms provided for under national law.”

Recourse to digital alternatives

Paraguay reportedly produces more energy than it consumes. As a result, several companies are interested in setting up cryptocurrency mining operations to exploit the potential surplus.

In July, Paraguayan Congressman Carlos Rejala and Senator Fernando Silva Facetti presented a bill on Bitcoin to Congress. In doing so, they showed the legislators’ determination to create a comprehensive digital asset policy for their nation. The legislation has now been passed by Congress. It will be discussed in the Chamber of Deputies in 2022.

Due to local economic and fiscal challenges, especially in Argentina, Venezuela and Mexico, South America has become a viable hotbed for cryptocurrency adoption. For example, the Argentines and Venezuelans have resorted to digital alternatives. For example, with Bitcoin, as a more viable payment option. Others, such as El Salvador, have taken a completely different approach. The president encourages the use of Bitcoin by the population.

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