Paraguay’s Senate authorized legislation over last week to regulate Bitcoin. That comes as the Latin American country hopes to be the second nation to permit crypto as legal tender.
The legislation approval comes after months of development, debates, and discussions of the new bill that might see crypto taxes and regulated cryptocurrency mining and possibly result in Bitcoin legalization in Paraguay.
If that occurs, Paraguay will be the 2nd nation on the globe to recognize crypto as an official currency. El Salvador pioneered that after adopting BTC. Fernando Silva Facetti also confirmed the nation’s interest in cryptocurrency adoption.
Keep in mind that the legislation requires a pass from the country’s Chamber of Deputies and a sign by Paraguayan President Mario Abdo Benitez to be law. Meanwhile, the lower chamber will evaluate the bill in the coming year.
Vital Sections of the Bill
Forming an authority to supervise crypto offering to the public to avoid money laundering and monitor Paraguay’s electricity needs as far as cryptocurrency mining is concerned. The National Securities Commission, Commerce Secretariat, Anti-Money Laundering Office, and the Nation Electricity Administration would regulate crypto-related activities.
Also, crypto miners require a Crypto Mining License. Miners that fail to acquire legal licenses will face sanctions.
The crypto bill formulates control and monitoring mechanisms for crypto transactions. Moreover, failure to adhere to the new monitory system might translate to sanctions.
Paraguay seeks to recognize digital coin mining as an innovative and electro-exhaustive space.
Token holders will also enjoy profitability rights or benefits from a crypto investment project called utility token. With a security token, holders own a portion of capital utilized for the project’s development.
Also, trading entities such as exchanges should inform acquires about virtual assets trading conditions and notify market players that the nation does not recognize digital coins as legal tender. Thus the Central Bank of Paraguay does not back the assets.
Paraguay Attractive to Miners
Paraguay boasts the lowest electricity cost in the area at $0.05 KWh. That seems attractive to crypto mining firms. The bill highlighted that the nation only uses a 3rd of the produced power, and crypto mining might utilize the surplus energy in Paraguay’s electricity grid.