Key Takeaways
- The crypto regulation bill is returning to the Senate, with the Chamber of Deputies’ changes and modifications.
- The legislation aims to further attract international miners to the country.
- Senator Fernando Silva Facetti says the new legislation enjoys favorable technical opinions from the Treasury, MIC, Seprelad
Paraguay’s Chamber of Deputies on May 26 approved a bill regulating crypto mining and trading and received a 40-12 vote. In December last year, the Central American country’s Senate had already passed a similar legislation, and the bill will now return to that body with the Chamber of Deputies’ changes and modifications.
Once the Senate approves the changes and gives the green flag, the pending law would move to the executive branch. The executive branch is yet to signal whether it will sign or veto. The past bill approved by the Paraguayan Senate in December states that individuals or companies interested in bitcoin mining will now have to request authorization for industrial energy consumption.
Fernando Silva Fecetti, a National Senator in Paraguay, commenting on problems caused by the lack of crypto regulation tweeted “AndeOfficial is harmed by several mines that risk energy availability to the population, Haciendapy does not receive taxes that correspond, cannot control so much activity, SepreladUIF investors and consumers operate in a legislative loophole that creates uncertainty for everyone”. Administración Nacional de Electricidad/ANDE is the operator of Paraguay’s national electricity grid, Haciendapy refers to the Ministry of Finance of the Republic of Paraguay and SepreladUIF is the Secretariat for the Prevention of Money or Property Laundering.
While justifying the necessity for the bill, he said “The bill is needed to provide legal guarantees, investment and work opportunities, to locate the country’s excess electrical energy and help those who want to dedicate themselves to mining and receive taxes for the sales and profits that the sector generates.” He further adds that the bill was debated in Public Hearings and a Technical Working Group and has favorable technical opinions from the Treasury, MIC, Seprelad.
The new legislation states that it would now allow bitcoin miners to access the country’s surplus of thousands of megawatts of electricity if it were to be regulated. According to congressman and one of the bill’s authors Carlos Rejala, at $0.05 per kilowatt-hour, Paraguay has one of the lowest electricity rates in the region. He commented the legislation further aims to attract international miners to Paraguay. If the bill becomes law, both individual and corporate miners will have to seek authorization requests for industrial electricity consumption and then further apply for a license.
The bill proposal also creates a registry for any individual or legal entity planning to provide crypto trading or custody services for third parties; however, the concept of exchange is still unclear. While debating against the legislation, Congressman Tadeo Rojas (ANR-Central) said that the impact on job creation is low compared with the energy consumption required by mining companies. Congressman Sebastián García (PPQ-Capital), in favor of the proposal, said the bill will set ceilings so that energy consumption is in line with the availability.
Recently, G7 countries, during its annual meet, have called for comprehensive crypto regulation. Efforts to regulate the cryptocurrency market are escalating in the US following the TerraUSD crash. The new development comes at a time when Ecuador, another Latin American country, is also intending to issue a regulation on cryptocurrency soon. Ecuador recently made headlines as the first country in the world to make Bitcoin a legal tender. With Latin American countries now taking the plunge by regulating cryptocurrencies, it is expected that the other countries might follow suit soon.
