Many countries all around the world are working on developing a regulatory framework that can address the different activities that are part of the crypto sector.
Crypto mining is one said activity and Paraguay is one country that has been making some effort to regulate it through the introduction of a bill.
The lower house of the country’s bicameral legislature called the Chamber of Deputies recently faced a setback.
They were unable to take a bill forward, which was aimed at legalizing crypto mining through the use of surplus electricity.
The President of Paraguay, Mario Abdo Benitez, had vetoed the bill in question and the legislature was unable to reverse it.
In the session conducted on December 5th, the members of the country’s legislature had a discussion on the pros and cons of offering incentives to crypto miners to carry out their activities by imposing a cap on the rates of electricity.
However, the members ultimately did not vote in favor of the amendments that would have helped in reversing the veto of the president.
According to regulators, it had been the absence of regulation associated with crypto-related activities, which had resulted in the implosion of the FTX crypto exchange.
They also highlighted the volatile nature of some cryptocurrencies, such as bitcoin, and the potential benefits that crypto mining can offer in Paraguay.
Crypto mining benefits
Carlos Sebastian Garcia said that crypto mining would benefit the local economies because it would generate municipal taxes, a source of employment, VAT as well as investment in capital.
He said that reversing the veto was the best route because this would ensure that the field is regulated and not left free once more.
He added that it would also give the crypto mining industry a starting point, as it has a lot of potentials and there is plenty of room for growth as well.
Jose Reynaldo Rodriguez said that they intended to charge a 15% higher rate for electricity consumption from the crypto mining industry, as opposed to other industries.
He said that this would subsidize the cost of energy for citizens.
The legislation’s reconsideration, which was focused on the regulation and marketing of crypto got 38 votes from 80.
There were nine lawmakers who decided to vote against it, while the remaining chose to abstain, or were not present.
The bill had originally received approval from the Paraguay senate back in July and had it been passed, it would have given crypto mining the status of industrial activity in the country where electricity rates are low.
A 15% tax had also been established by lawmakers on crypto-related activities. However, the president of the country decided to veto the bill back in August.
Therefore, the lawmakers had no other option but to revisit the legislation in December.
Local and foreign crypto mining in Paraguay has gotten a boost due to low energy costs and many have installed their mining rigs to benefit from the surplus in energy.
Neighboring country Uruguay has also taken steps to regulate crypto, as they introduced a bill in September, which was meant to establish the central bank in the country as the regulatory body for digital assets.
Russia is also attempting to pass a bill similar to Paraguay that would declare crypto mining as an industrial activity.