Paraguay’s Digital Currency Regulation Bill Moves Closer to Passage

Paraguay is one step closer to regulatory clarity in the digital currency industry. The lower house of Paraguay’s bicameral National Assembly, the Chamber of Deputies (Cámara de Diputados), voted 40 to 12 in favor of advancing a bill to regulate the manufacturing industry. digital currency.

The bill, which was first introduced in July 2021, will now proceed to amendments in the Senate for further consideration. Once the Senate approves the law, it will be forwarded to the executive for signature. However, the executive has not yet indicated whether it will sign or veto the bill.

The bill will regulate commercial activities related to digital currencies, including bulk trading and reward mining. If passed, it will require digital asset companies to register with regulators to conduct operations in the South American country.

“The purpose of this law is to regulate the activities of production and marketing of virtual or cryptographic assets, in order to guarantee the legal, financial and tax security of the companies resulting from their production and marketing,” the bill states.

Despite the favorable vote, the bill’s proposals still face opposition. During the debate in the Chamber of Deputies that preceded the vote, lawmakers expressed concern about bulk mining’s electricity consumption and uncertainty about anti-money laundering safeguards.

Countering concerns, Carlos Rejala, one of the main authors of the bill, said the law focuses on the traceability of digital assets. The bill also seeks to shift responsibility for regulatory oversight of the digital asset industry to government parastatals.

Digital currencies will not be legal tender in Paraguay

Another emphasis from lawmakers is that the bill will not make digital currencies legal tender in Paraguay. Since El Salvador made Bitcoin legal tender, many other countries, including Paraguay, have begun to consider the prospect more seriously.

At the time the bill was introduced, Reuters speculated that Paraguay could be the next country to follow in El Salvador’s footsteps. This is all the more so as the country has sought to lure international block reward miners to its cheap and plentiful electricity supply.

Notably, the Senate passed a bill similar to the current one in December 2021. The Senate bill placed the Secretariat of Industry and Commerce as the oversight body for the rewarded mining industry. overall while labeling the National Security Commission and the Anti-Money Laundering Bureau to play certain roles in the marketplace.

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Sylvia B. Polson