Bitcoin trading and mining will now be under the crosshair of the Paraguay government.
Last month, the Chamber of Deputies of Paraguay endorsed a measure to regulate cryptocurrencies over opposition from the country’s central bank. Bitcoinist reported that during a special session in May, deputies approved the modified crypto law draft by a vote of 40 to 12.
Now, Paraguay is laying the groundwork for regulating cryptocurrency activity after the country’s senators approved the proposed legislation.
Suggested Reading | Coinbase Rumors Going Insolvent Grow – Here’s What People Are Saying
Paraguay Senators Give Nod To Bitcoin Regulation
Friday, the Paraguay Senate approved a bill that would regulate and commercialize cryptocurrency trading and mining in the South American nation.
Fernando Silva Facetti, minister of technology, information, and communication in Paraguay, was happy to announce the new law through Twitter.
1) #Cripto #Paraguay After an intense debate @SenadoresPy, we’ve approved the Bill that regulates #cryptoasset activities. This new law establishes obligations, rights and warranties to investors, to the consumer and the Government…. #Bitcoin pic.twitter.com/ODpQxC3XZy
— FernandoSilvaFacetti (@FSilvaFacetti) July 14, 2022
The country’s Chamber of Senators had already approved the bill in December, but the Chamber of Deputies passed it with amendments last month. Consequently, the bill returned to the top chamber.
Paraguay’s new crypto legislation may turn the nation into a mining hub. Image - Flickr
Based on the main ordinance proposed by the Chamber of Deputies and with Senate approval, the Ministry of Industry and Commerce of Paraguay will be the primary public authority. It will penalize anyone or any legal entity using cryptocurrency for mining or other services without the necessary authorization.
The proposed crypto bill gave more authority to the Secretariat for the Prevention of Money or Asset Laundering, which will oversee the entire investment process undertaken by crypto startups.
Bitcoin Legislation Benefits Crypto Miners
The bill also assigns the National Electricity Administration responsibility for facilitating the energy supply, while the National Securities Commission supervises commercial activity using crypto assets.
Paraguay’s two dams, Itaipu and Usina, provide 85 percent of the country’s entire electricity requirements. Therefore, the nation supplies reasonably priced energy.
BTC total market cap at $421 billion on the daily chart | Source: TradingView.com
While this is an advantage for bitcoin miners, the proposed legislation pushes the energy advantages a step further by giving crypto miners with the excess electricity produced by dams.
Bitfarms, a Canadian bitcoin miner, is one of the largest mining companies in Paraguay, with a 10-megawatt plant built in the city of Villarica, situated in the country’s south-central region.
?PARAGUAY: #Bitcoin and crypto companies exempt from paying VAT in newly approved bill.
— Bitcoin Archive ??? (@BTC_Archive) July 16, 2022
According to reports, companies operating in the cryptocurrency sector would be taxed similarly to those who trade in securities. As a result, the Undersecretary of State for Taxation will exempt them from paying value-added tax, but they will be subject to income tax.
As of this writing, Bitcoin is trading at $22,080, up 5.8 percent in the last seven days, data by Coingecko show, Monday.
Suggested Reading – Bitcoin Gives Way To Ruble: Putin Signs Law Banning Crypto Payments In Russia
Featured image from Benzinga, chart from TradingView.com