Paraguay’s crypto framework one step away from becoming law

Paraguay’s crypto framework one step away from becoming law

On July 14, the Paraguayan Senate approved a bill that established a tax and regulatory framework to support businesses in the cryptocurrency mining and crypto-currency sectors.

The bill was introduced by Senator Fernando Silva Facetti last July and passed Congress in May, before reaching the Senate. It calls for the creation of the Ministry of Industry and Commerce to supervise service providers in the crypto industry. President Mario Abdo Benitez is just one step away to ratify the bill as law.

In May, Congress sent a notice stating that the bill specifically addresses crypto mining, commercialization and intermediation.

ABC News reported that crypto-related companies would be treated in the same way as other securities traders on July 14. Accordingly, the Undersecretary for State for Taxation will exempt them from paying a Value Added Tax. However, they will still be subject to the income tax regime.

PARAGUAY: Newly approved bill exempts #Bitcoin companies from VAT
— Bitcoin Archive (@BTC_Archive), July 16, 2022

According to reports, the bill will address how crypto miners should interact and cooperate with local power providers. Prospective mining operations will have to report their energy consumption schedules to the National Electricity Administration (ANDE), Paraguay’s national electricity regime. ANDE can cut off electricity supply to miners if they are found to be using more electricity than expected.

The bill states that miners will receive a subsidy for their energy costs, but they will still have to pay 15% more than other industries.

According to reports Senator Faceti stated that modifications to the bill made over the past year “improved” the original project.

Senator Enrique Bacchetta, one of the bill’s detractors, stated that although regulation of the crypto industry would increase profits, it would not create any jobs for his fellow citizens. Senator Esperanza Martnez echoed Senator Baccetta’s concern, claiming that miners consume far more energy than the jobs they create.

Related: USD stablecoin premiums rise in Argentina after resignation of Argentina’s economy minister

Paraguay is now the latest LATAM country to make a significant leap in crypto regulation and adoption. El Salvador adopted Bitcoin (BTC), which was made legal in 2021. The governments of Panama, Argentina, Brazil and Panama are also working on crypto legislation.

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