Paraguay Sets Framework to Regulate Crypto Trading and Mining
- Paraguay’s Chamber of Deputies approved a bill regulating crypto mining and trading.
- The bill aims to make Paraguay an international hub for miners.
- Many in the crypto space expect Paraguay to be the next nation to adopt BTC as legal tender.
Paraguay is the newest nation to keep up with the growing Web3, blockchain, and cryptocurrency space. After El Salvador and the Central African Republic adopted bitcoin as legal tender, Paraguay is heading towards the space to keep up and introduce ways to regulate the asset class.
Regulating Crypto Trading and Mining
On Wednesday, Paraguay’s Chamber of Deputies (second chamber of Congress) approved a bill regulating crypto mining and trading with a 40-12 vote. In December, the country’s Senate had already passed similar legislation; now the bill is supposed to return to that body with the Chamber of Deputies’ modifications.
If the Senate approves the changes, the pending law will move to the executive branch, which has not indicated whether it will sign or veto the measure yet. The entire bill session was streamed on YouTube on May 25.
If the legislation is officially adopted as a law, any individual or corporate miner can apply for authorization for industrial electricity consumption. Miner, however, would need to apply for a license for the same.
Moreover, the law envisages the creation of a registry for any individual or legal entity wishing to engage in crypto trading or custody for a third party. The concept of exchange, however, is still absent.
In particular, the bill aims to make Paraguay an international hub for miners. Additionally, the country’s low electricity costs could favor this move as Paraguay has about five cents per kilowatt-hour, the lowest electricity rate in Latin America.
Can Paraguay Adopt BTC as Legal Tender?
In late March a poll by CoinMarketCap highlighted that Paraguay could be the first among the top three countries predicted by the community to be the next to adopt crypto as legal tender, followed by Venezuela and Anguilla.
For now, while there was no update about the nation adopting BTC as legal tender, the advancements in the space have been positive. However, the bill has faced strong resistance from the opposition.
Congressman Tadeo Rojas opposed the legislation as well, arguing that the Chamber of Deputies’ budget committee recommended against it. In addition, he expressed the view that the positive effect on job creation was small compared to the energy consumption required by crypto mining.
That said, Congressman Sebastián García spoke in favor of the proposal, saying that the bill sets ceilings so that energy consumption is in line with the availability.