Paraguay’s High Chamber recently granted half sanction to the bill that gives a regulatory framework to digital assets and bitcoin mining in the country.
The adoption of bitcoin in Latin American countries continues its march by leaps and bounds, with an increasing number of governments interested in this trend.
While El Salvador became the first country in the world to officially recognize bitcoin as legal tender in 2021, multiple countries are currently working on various projects to regulate this asset class. Paraguay, in particular, has just taken an important step towards approving its own Bitcoin Law.
The Paraguayan Senate has just approved the Bitcoin law, and has added a series of amendments to the regulation that seeks to regulate the trade, custody, and mining of BTC, as reported by the official website of the legislative body.
The bill was discussed earlier in the Chamber of Deputies, framing obligations, rights, and guarantees to investors, consumers, and the State.
Once the bill is approved by both legislative chambers, the law is passed to the executive power, which has the power to approve or veto it.
In May this year, Paraguay’s Chamber of Deputies approved the bill by a 40-12 vote.
This regulation is part of Paraguay’s plans to become a cryptocurrency hub, boosted by its development in the hydropower industry.
The Bitcoin Law and Bitcoin Mining in Paraguay
The bill focuses particularly on the regulation of cryptocurrency, and provides greater powers for the activity to the Ministry of Industry and Commerce, which is in charge of controlling the industry at a national level.
It also gives powers to the National Electricity Administration, so that it can enable energy for mining operations. On the other hand, the National Securities Commission will be in charge of the commercialization of assets throughout the country.
The law especially clarifies that individual and corporate miners are responsible for requesting authorization for the consumption of industrial electricity, and together with this, they will be granted a license to operate.
As for the corrections made to the law, it has a reform that frames the companies that are going to mine so that they are exempt from VAT taxation. Although they will be included in the income tax regime.
Fernando Arriola, shareholder and vice president of BC Mining Paraguay, recently said that if mining is recognized as another industry in the country, the landscape will change completely.
“The law would require users to provide their first and last name. Today there is a legal loophole in mining and trading because it does not exist as insutria in front of the sub-secretariat of taxation, ” said Arriola.
Arriola revealed that every week they receive requests for quotations from Asian companies interested in setting up in Paraguay.
On average, a Chinese company requires at least 100 MW of energy to be able to operate, which is equivalent to an investment of approximately $200 million.
Bitcoin continues to be regulated only by its own protocol and grows with or without support of governments around the world.