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The President of Paraguay, Mario Abdo, has issued an executive veto against a newly approved cryptocurrency bill. Abdo’s veto decree states that cryptocurrency mining is an “energy-intensive” activity and a low-value activity. The bill will now be returned to Congress to be reauthorized or to be rejected outright.
The President of Paraguay, Mario Abdo, has exercised an executive veto over the newly approved cryptocurrency bill, after more than a year of discussions in the Paraguayan Congress. Introduced in July 2021, the project aims to clarify the rules that cryptocurrency mining operators and other virtual asset service providers must follow on Paraguayan soil.
The proposed bill stipulated that cryptocurrency miners would pay a power fee that is 15% higher than that paid by other similar industries. However, Adbo’s veto order states that this activity is “characterized by the high consumption of electrical energy, with intensive use of capital and little use of labor.” The confession presents a bleak picture of activity in Paraguay, predicting that if there is significant growth in this industry, the country may be forced to import energy sometime in the future.
This action could slow down the growth of the cryptocurrency and bitcoin mining industry in the country. Some companies had already explored a possible entry into the country since the Chinese mining veto that occurred last year.
The veto responds to some concerns presented by the national power administration in the country in August. At that time, it stopped supplying electricity to some miners due to the significant losses it was facing. This was the consequence of the power theft and power measurement irregularities carried out by some mining companies. Officers at the institution stated that it had recorded losses of more than $400,000 monthly, and declared their opposition to the cost structure presented in the now-vetoed proposal and their support for a partial veto of it.
The future of the cryptocurrency bill is now uncertain as it needs to be sent to Congress for the representatives to accept this move or try to pass the cryptocurrency bill again. This would not be the first time a president has exercised his veto powers to stop a cryptocurrency-related bill in Latin America, as President Laurentino Cortizo vetoed a similar initiative in Panama last June, citing concerns related to the laundering of cryptocurrencies that cause.
What do you think of the veto by the president of Paraguay on the proposed cryptocurrency bill? Tell us in the comments section below.
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