Not Just Another Bukele: Paraguay to Regulate Crypto Mining

• Paraguay’s upcoming crypto bill seeks to give crypto mining industrial activity status.
• Action follows El Salvador’s adoption of Bitcoin last month as a sovereign currency in that country.
• If either country fails, it’s very likely that countries will seek to enact even tougher regulatory restrictions.

Bitcoin’s allure is transcending borders in Latin America. Another law is under way, this time proposing a regulatory framework for a licensing process for Bitcoin mining.

The Chamber of Deputies of Paraguay’s Congress is currently considering a bill that would establish cryptocurrency regulations. Those guidelines would formally recognize and authorize the use and mining of digital assets within that country. Congressmen Silva Facetti and Carlitos Rejala co-drafted the proposal – a translated version of which can be viewed here.

Congressman Rejala posted a message to his Twitter followers on July 15th, after submitting the draft legislation to fellow lawmakers

The translated tweet reads:

“As we had already announced, yesterday we presented the "Bitcoin Law" project. This bill provides a clear regulatory framework on the cryptocurrency generation industry attracting foreign investment in Paraguay.” This action follows El Salvador’s adoption of Bitcoin last month as a sovereign currency in that country.

That initiative was spearheaded by Salvadorian President, Nayib Bukele who was looking to raise the economic options for 70% of his country’s population, which lacks access to any banking or financial services.

There are several differences between the two countries’ legislative approaches to cryptocurrencies, which include:

• The bill in Paraguay is much longer, with 22 articles, and more specifics than El Salvador’s law
• Paraguay’s proposal seeks to establish a licensing process for Bitcoin mining
• It will also set up regulatory guardrails to protect cryptocurrency investors, which larger don’t exist elsewhere
• The most significant difference is that the Paraguay bill does not grant Bitcoin, or any cryptocurrency, legal tender status – pending approval, digital assets will be classified as property

“After this bill passes, Paraguay will position itself in this competitive industry, and plans to lead in sustainable Bitcoin mining,” Congressman Rejala posted via Twitter.

On The Flipside

• Both El Salvador and Paraguay are embarking on massive economic experiments that some non-government organizations don’t support, namely the International Monetary Fund and World Bank.
• It’s possible that both global funding organizations could withhold critical monetary support to subtly sabotage either economy in the short term.
• If either country fails, it’s very likely that countries will seek to enact even tougher regulatory restrictions.

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