Crypto framework law one step away
The deliberation has gone on for about a year and the lawmakers in Paraguay seem to have finally agreed on a regulatory framework for crypto that takes businesses and traders into consideration.
Thursday of last week a bill was passed creating a regulatory framework for businesses operating in crypto. The bill was introduced last year by a Senator Fernando Silva Facetti and was approved in the Congress in May. There will be a Ministry of Industry and Commerce formed to regulate and oversee all crypto providers. The next step is for the bill to make its way to Paraguay president Mario Abdo Benitez to be ratified.
The details of the bill speak specifically on the regulations of crypto mining, commercialization, exchange, custody, transfer, intermediation, and administration of the assets including but not limited to control over crypto assets via use of any type of crypto instrument. Those that deal in crypto would be treated the same as any company that deals with securities, this is mainly for tax purposes. This will result in value-added taxes but will be included in the income tax regime by the Undersecretary of State for Taxation.
In keeping with green initiatives the bill also states regulations for crypto miners and local power suppliers, focusing on how energy consumptions and emissions should be controlled and monitored. The mining operations will be required to provide consumption schedule reports to the National Electricity Adminitstartion(ANDE) of Paraguay. Using too much electricity would be means for the cessation of power to the user. Miners will have power subsidized but still required to pay 15% more than other industries.
The bill is not 100% supported as opponents state their disbelief in the bill actually creating new avenues of employment. Another pressing issue is some believe the energy consumption rate would also outpace the number of jobs created.
Paraguay is not alone in this adoption of crypto as El Salvador adopted Bitcoin as legal tender later in 2021. Currently more South American countries such as Brazil, Argentina and Panama are all working on legislation that would bring crypto into their main markets.