A New Paraguayan Bill That Regulates Crypto Mining and Trading Will Soon Become Law

Facebooktwitterredditpinterestlinkedinmailby feather

In times of crisis and uncertainty, countries around the world are moving fast to adopt crypto. People see it as an alternative to traditional investment assets such as gold. And they’re right – even though it’s highly volatile, crypto seems like a better choice right now. That’s why many countries have adopted it, most notable El Salvador, and recently South Africa. Bitcoin might soon get a third running horse in Paraguay.

The South American country decided to take a legal stance with Bitcoin, preparing a new law that will regulate crypto mining and trading. Similar legislation has already been passed last December by the Paraguayan Senate, but the bill will now see extensive modifications that will essentially make Bitcoin legal in the country. Not legal tender, mind you, but mining and trading will now be regulated.

Up to the Senate to Approve the Bill Changes

As mentioned earlier, similar legislation passed in December in the Senate. The bill will now return to the Chamber of Deputies for extensive modifications. According to legal experts, the bill aims to attract international miners to the country. Paraguay has one of the lowest electricity rates in South America, but by attracting miners, the 5 cents per kilowatt-hour rate may increase.

If the bill becomes law, individual and commercial miners will have to apply for a license to use industrial electricity. At the same time, it will also provide legal framework for any legal and individual entity to provide crypto trading. Custody services for third parties will also be available, but surprisingly, the exchange concept is not part of the bill.

Some congressmen have already battled the proposed bill, saying that the Chamber of Deputies has already rejected it in December. Of course, the bill has its supporters in the Senate too, with many hoping that it will lead to more jobs created and improve Paraguay’s electricity network.

The World Bank Disapproves of CAR’s Bitcoin Legal Tender Move

While Paraguay is looking to attract miners and traders to the country, the Central African Republic decided to make Bitcoin legal tender. The country has been in a turmoil for a long time, with the financial sector greatly affected. In hard times, the president decided to turn to Bitcoin and crypto, and expectedly, the World Bank disapproved of the move.

Both the World Bank and the Central African Bank have criticized the country for making Bitcoin legal tender. They believe it’s a wrong move that will hurt the country’s economy in the long run, just like it’s hurting El Salvador. And, while the current price drops certainly do Bitcoin no favors, there’s no way to tell how high it can go by the end of the year or even tomorrow.

Crypto volatility is something countries such as El Salvador and CAR have to live with, but both are adamant that crypto is the better option in the long run. Paraguay may soon join them in their crusade against the global finance sector, but before that happens, it needs to pass the new crypto bill first.

June 1, 2022: • No Comments

Comments are closed.