The Paraguayan Senate adopts bills to regulate crypto-mining and trade
The Senate of Paraguay, a South American nation, on Thursday, approved a bill to regulate mining and cryptocurrency trading in the country.
The adoption of the law is part of an approval passed in December last year, but was amended in May by the Chambers of Deputies (the lower house of Paraguay’s bicameral legislature) and therefore returned to the upper house (Senate) for further consideration.
Both chambers have now approved the bill, and it must therefore be sent to the executive branch, which has the authority to approve or veto it.
The proposal, modified by the Chamber of Deputies and accepted by the Senate, designates the Ministry of Industry and Trade as the most important law enforcement authority to punish individuals or companies that operate mines or offer crypto services without obtaining legal authorization.
The bill further delegated powers to the Secretariat for the Prevention of Money Laundering or Assets to be responsible for monitoring the entire investment process carried out by crypto firms. In addition, the bill designates the National Electricity Administration to be responsible for enabling the energy supply while the National Securities Commission is tasked with overseeing commercial activities involving digital assets. This involves licensing and supervision of crypto mining companies operating in the country. The proposed law does not legalize cryptocurrencies.
The bill states that individual and corporate mining companies are expected to apply for approval for the use of industrial electricity consumption and then apply for a license. The proposed legislation also creates a register for any individual or company wishing to offer cryptocurrency trading or custodian services to third parties.
The new legislation also requires crypto exchanges to register their activities as service providers of virtual assets with the anti-money laundering agency in Paraguay.
Expands the legal framework for crypto
Paraguay’s latest bill appears to be based on previous legislation. In July last year, Paraguay became the second country to propose a bill to make Bitcoin a legal tender after El Salvador announced the crypto as a legal tender in June last year.
However, the bill was quite different from El Salvador. A leaked draft of Paraguay’s cryptocurrency account showed that the country had no intention of making Bitcoin or any other cryptocurrency legal in the country.
Instead, the nation’s focus was on creating a regulatory framework, especially when it comes to taxation. The aim of the legislation was to create legal certainty, financially and fiscally, in the companies that originate from the production and trading of digital assets.
Unlike El Salvador, Paraguay has had many of the same concerns as some other nations have had with cryptocurrencies – taxation. The nation wanted to ensure that crypto companies are brought under the tax regime and have traceability for such transactions and investments.
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