For over a year the Paraguayan lawmakers were constructing the regulatory laws for a crypto framework to include businesses and traders. The bill establishing tax and regulations for businesses operating in cryptocurrencies and mining was passed on Thursday by the Paraguayan Senate.
The bill was introduced in July 2021 by Fernando Silva Facetti, the National Senator of ARLP party. It passed through Congress in May, before reaching the Senate, with a notice that refers specifically to crypto mining, exchange, commercialization, and other services. There was a request for the formation of the Ministry of Industry and Commerce (MIC) to supervise the crypto industry and service providers, which poses as the last step before the bill is passed by President Mario Abdo Benítez as law.
According to the news report, starting Thursday, the crypto companies will be treated the same as those companies which deal with securities for tax purposes. In addition, the crypto companies will not be required to pay Value-Added Tax (VAT), but will still be required to follow the income tax regime.
The bill considers how the crypto miners will affect the local power supplier and the energy consumption of miners. The reports to the National Electricity Administration (ANDE) should be made regarding the consumption of energy by crypto miners. If miners exceed the planned electricity consumption, they risk being cut off by the ANDE.
Senator Enrique Bacchetta is one of the critics of the bill. He questioned if the regulation of the crypto industry would lead to greater profits and create new jobs for the citizens. Another Senator supported his words, claiming that the energy consumption rate from miners would exceed the number of jobs created.
Paraguay thus becomes the most recent Latin American nation to lean toward crypto adoption and regulation, following El Salvador in 2021, which adopted Bitcoin (BTC) as their legal currency.