The lawmakers of Paraguay have reached a decision for a year on a crypto regulatory framework suited for businesses and traders. The bill was passed by the Senates of Paraguay on Thursday, instituting a tax and regulation framework for operation businesses related to cryptocurrency and crypto mining dependency networks.
Senator Fernando Silva Facetti introduced the bill last July and approved it by Congress in May before reaching the Senate. The establishment of the Ministry of Industry and Commerce (MIC) is called to regulate the service providers of the crypto industry. The bill is now in the queue of President Mario Abdo Benítez to sign as law.
The bill explicitly refers to crypto mining, commercialization, intermediation, exchange, transfer, custody and/or administration of crypto assets, or instruments that enable control over crypto assets, according to a notice filed in Congress in May.
Companies that operate in the crypto industry would be treated the same purpose as the ones dealing with securities for tax purposes, according to reports from local news outlet ABC on Thursday. With this, the Undersecretary of State for Taxation will exempt those companies from paying a value-added tax(VAT), but the income tax regime will be included.
The bill reportedly considers interactions between crypto miners and local power suppliers. To report the energy usage schedule to the National Electricity Administration (ANDE) — Paraguay’s national electricity regime — prospective mining operations will be required.
ANDE may cut off the miner’s electricity supply should the latter be found consuming more supply than planned.
According to the reports, Senator Facetti said this is an improvement of the original project by making modifications to the bill over the last year.
Senator Enrique Bacchetta, one of the bill detractors, reportedly stated that while regulating the crypto industry would lead to greater profits, this also brings a question of whether it would actually create jobs for his fellow citizens.
Senator Esperanza Martinez also seconded such concerns, claiming that the potential number of jobs they created would be outpaced far behind by the miners’ energy consumption rate.
This makes Paraguay the latest LATAM nation to take a leap in crypto adoption and regulation. Back in 2021, Bitcoin (BTC) was adopted by El Salvador as a legal currency. The governments of Argentina, Brazil, and Panama are all working on their own crypto legislation.
