Paraguay: Senate pass government bill regulating crypto, what does this mean for you?
Today’s article is more of an update, and an exciting one at that. We have covered cryptocurrency in Latin America a number of times on our blog, including countries like Argentina and Paraguay, both of which are seen as innovative and exciting nations for mining and adopting crypto into their everyday life.
Now, the focus for today is Paraguay specifically, where, as of last Thursday (July 14th), the bill for the regulation of crypto assets was approved in the national Senate. It has been a year since this bill was proposed, and a couple of months since it was passed in Congress, however, now that it has been passed by the Senate there is only one step to go until it finds itself firmly fixed in law.
What does the bill cover?
Below you can find a list of the crypto activities covered by the regulations proposed by the bill:
· Custody/Administration of crypto assets
While this list is not too extensive, the broadness of the points included means that most aspects of crypto-asset activity is regulated, providing a suitable framework through which miners and traders alike are guided in their operations and staying within the law.
What does this mean for me?
There are two ways to approach this, commercially and personally. We’ll start with the former.
Commercially speaking, those of you who mine crypto and are looking to expand to Paraguay and make the most of Latin American innovation in the sector will be expected to maintain a trusting relationship with power suppliers in the region you select. What does this mean? In essence, you need to report your energy usage to the National Electricity Administration, who, if they deem you are over-using power, are able to deny the supply.
This is therefore a key element to consider, as, be it intentional or accidental, failure to comply could be costly to your business. However, it is not all regulatory, there are also benefits for businesses, namely that Bitcoin and crypto businesses are reportedly going to be exempt from VAT payments. Power bills will also be subsidised, and while more expensive than for other industries, these subsidies make Paraguay competitive in the market.
Personally speaking, while the regulations do not bring profit-inducing incentives, the framework that large corporations have to remain within serves to reassure those involved in crypto trading are protected.
What is Paraguay’s potential under this new bill?
The benefits of passing such a bill extend beyond those for companies and individual players in the market, in fact, the benefits for Paraguay make the bill a mutually beneficial prospect. Why? Well, the proposed project would provide ample scope for the nation to develop into one of the region’s (and the world’s) largest hubs for crypto asset activity. Not only this, but the focus on renewables makes the nation a promising prospective nation for green crypto mining, a key change which needs to take place to protect the longevity of the industry.
So, if you are interested in finding out more about Paraguay as a hub for crypto-asset activity, as well as other opportunities to develop your business, contact us today! Below this article, you will find a link to set up a free fifteen-minute consultation with us to discuss your options further.
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