Paraguay Senate inches forward to regulating digital currency
The Senate of Paraguay on December 17 approved a cryptocurrency bill that was originally introduced in July. The latest provisions define several key terms that include virtual assets, call for licenses for mining cryptocurrencies, and more.
The new bill is set to be forwarded to the Deputy Chamber for further deliberation. The bill’s sponsor, Senator Fernando Silva Facetti, has also revealed that the crypto bill was passed in the Paraguayan Senate after a contentious debate.
According to Facetti, the law also aims at fostering the growth of crypto mining activities by using surplus electricity that is generated in the country.
The document of legislation includes a definition for virtual assets, tokens, crypto mining and VASPs (virtual asset service providers). It further grants the Ministry of Industry and Commerce of Paraguay the authority to seek assistance from government bodies that fall outside its boundaries in the implementation of the law.
The bill has explicitly stated that cryptocurrency mining would be a legal activity, noting that virtual asset mining has now emerged as “a digital and innovative industry” that can benefit from all incentive mechanisms that have been provided in national legislation.
Paraguay produces more energy than it consumes overall. As a result, several firms have shown interest in establishing cryptocurrency mining operations in the country for exploiting this potential surplus.
In July of 2021, Senator Fernando Silva Facetti and Congressperson Carlos Rejala had presented a Bitcoin bill in Congress to demonstrate the lawmakers’ commitment into crafting a comprehensive digital asset policy for their country. The same legislation has now been passed by the national Congress and is due being discussed in the Chamber of Deputies in 2022.
Owing to local economic and fiscal challenges, especially in countries like Argentina, Mexico, Venezuela, and South America, these places have emerged as a viable hotbed for cryptocurrency adoption.
For instance, as the national fiat currencies of Argentinians and Venezuelans crumbled, the citizens have been turning to digital alternatives like Bitcoin as a payment option.
Others like El Salvador have taken a completely different approach as the president himself has been encouraging the use of Bitcoin on its people.