- Paraguay passes legislation to regulate cryptocurrency focused on mining companies.
- According to the bill, miners – whether individuals or firms will need to acquire authorization for industrial electricity usage before applying for a licence.
- According to the bill, bitcoin miners might benefit from thousands of megawatts that Paraguay now has as surplus, assuming it falls under the country’s restrictions.
The Paraguayan Senate passed legislation on Thursday to regulate Bitcoin and cryptocurrency trading and mining in the country. The bill’s co-author, Senator Fernando Silva Facetti, announced on Twitter that it will be debated in the Chamber of Deputies of Paraguay in 2022.
Bitcoin is not accepted as legal money in Paraguay. However, Carlitos Rejala, a congressman from Paraguay, gave an exclusive look at the bill’s drafting in July. The bill hinted at tighter regulatory oversight of bitcoin mining by the country’s officials and an overarching goal of protecting investors from businesses that provide bitcoin services.
At the time, Rejala stated,
“With this we want to welcome the innovation of cryptocurrencies in Paraguay to the world. This is the result of a very strong and arduous teamwork of many experts in the field, both local and foreign.”
According to a measure approved by the Paraguayan Senate, individuals or firms interested in bitcoin mining would have to acquire authorization for industrial energy usage. However, once the approval is obtained, the company must still apply for a mining licence to mine bitcoin.
The bill also proposes a registration for any individual or legal body wanting to provide crypto trading or custody services for third parties, despite the absence of the idea of exchange.
The Industry and Commerce Secretariat regulates cryptocurrency mining in the country, with assistance from the Anti-Money Laundering Office and the National Securities Commission. Meanwhile, the National Electricity Administration will be active in regulating the activities.
Meanwhile, despite not explicitly articulating the idea of an exchange, the bill clearly implies that any individual or established corporate entity inclined to offer crypto trading or custody services to others will need to keep records.
“While El Salvador’s final bill was just a few pages of text representing easily the most favourable, accommodating Bitcoin legalese ever passed, the early draft of Paraguay’s legislation set a different tone.” Bitcoin Magazine noted in August, underlining how Paraguay chose to stand in sharp contrast to El Salvador’s friendlier legislation.
Paraguay is Seeking Cryptocurrency Miners:
The bill also acknowledges that Paraguay consumes just around one-third of the energy it generates. Crypto mining would almost probably pay for the thousands of megawatts of electricity that Paraguay would not now use if regulated.
In short, the law aims to take advantage of the Latin American country’s surplus energy and, as previously indicated, will be debated by the Chamber of Deputies in 2022.
According to the bill, bitcoin miners might benefit from “thousands of megawatts that Paraguay currently has as surplus” if it falls within the country’s constraints. According to the legislation, the Ministry of Industry and Commerce, the National Securities Commission, the Anti-Money Laundering Office, and the National Electricity Administration in Paraguay would all be in charge of the industry.
The cost of energy is among the most attractive in Paraguay, according to Congressman Rejala (who noted that about all of Paraguay’s electricity originates from hydroelectric sources). It costs about $0.05 per kilowatt-hour.