Paraguay getting closer to regulating digital currency

A bill that looks to regulate the local cryptocurrency industry has passed the Senate of Paraguay.

Paraguay getting closer to regulating digital currency

On Dec 17, 2021, the Senate of Paraguay approved a cryptocurrency bill presented in July. The provisions, which define several key terms including virtual assets and call for licenses to mine cryptocurrencies, will now be sent to the Deputy chamber for further deliberation.

Senator Fernando Silva Facetti, the bill's sponsor, revealed that it's passed in the Paraguayan Senate after a contentious debate. According to the Senator, the law also aims to foster the growth of crypto mining activities by using the surplus electricity generated in the country.

The body of the regulation includes a definition for virtual assets, tokens, cryptocurrency mining, and VASPs(Virtual asset service providers). it also grants the Ministry of Industry and Commerce the authority to seek assistance from government bodies outside its limits to carry out the law.

The bill explicitly states that cryptocurrency mining is a legal activity, noting that:

"Virtual asset mining is a digital and innovative industry. This industry will benefit from all incentive mechanisms provided in national legislation."

Paraguay reportedly produces more energy than it consumes. Accordingly, a few firms are building cryptocurrency mining operations there to exploit this possible excess.

In July, Paraguayan Congress person Carlos Rejala and Senator Fernando Silva Facetti introduced a Bitcoin(BTC) bill in congress, demonstrating the lawmakers' commitment to crafting a comprehensive digital asset policy for their country. the legislation has now been passed by the nation's Congress and will be discussed in the chamber of Deputies in 2022.

Due to local economic and financial challenges, particularly in Argentina, Venezuela, and Mexico, South America has emerged as a viable hotbed for cryptocurrency adoption. For ex. as their national fiat currencies crumbled, Argentinians and Venezuelans have gone to digital alternatives like Bitcoin as a more viable payment option, Others, such as El Salvador, have adopted a fully different approach, with the president empowering the utilization of BTC on the people.