Paraguay is largely considered a potential hub supporting crypto adoption because of low electricity costs and relatively soft taxation, and the local government is taking advantage by issuing new regulations.
Specifically, a bill which aims to set up regulations for cryptocurrency trading, mining and custody was reportedly proposed on May 25th, which received the greenlight from the Paraguayan Congress via a vote of 40 to 12.
The bill must now go obtain the ratification of the Senate to finally arrive at the final stage – President Mario Abdo Benítez’s review.
Should the ratification process go smoothly, the bill would be enacted to any individual or organization operating in Paraguay, which deals with the mining, commercialization, trading, transfer, production, custody or administration of cryptocurrencies and related functions.
The legislation reportedly put up a proposal for financial and legal guarantees to businesses and individuals, while at the same time imposing restrictions regarding the aspects of electricity spending and taxation.
For instance, a translation of article 11 of the bill claimed: “Crypto mining is recognized as an industrial and innovative activity. This activity will be a beneficiary of all mechanisms and incentives foreseen in the national legislation”.
Regulations will normally have to face resistance, however, with both the Paraguayan Central Bank and budget commission have shared an anti stance towards digital currencies, considering the initiative as a “high-risk project with no benefit for the state.”
This stance was also accompanied by the usual suspicion that cryptocurrencies aid criminal enterprise and substantially increase electricity costs.
Paraguay is reportedly among the numerous nations in the Latin America region spending extensive efforts in studying the regulation of digital assets. El Salvador started the trend of legalization in June last year via granting Bitcoin (BTC) the status of a legal tender.
Other nations with ongoing crypto regulation discussions include Brazil, Argentina, Uruguay and Panama.