Recently, the High Chamber of Paraguay gave a law that establishes a legal framework for digital assets and bitcoin mining there a partial approval.
With more and more governments showing interest in this development, the adoption of bitcoin in Latin American nations continues to advance quickly.
While other nations are already engaged in various schemes to regulate this asset class, El Salvador became the first nation in the world to formally recognise bitcoin as legal money in 2021. In instance, Paraguay recently made a significant advancement toward passing its own Bitcoin Law.
According to the official website of the legislative body, the Paraguayan Senate has recently passed the Bitcoin law and made a number of adjustments to the rule that aims to control the trade, custody, and mining of BTC.
The bill, which outlines obligations, rights, and guarantees to investors, consumers, and the state, was previously addressed in the Chamber of Deputies.
A bill is delivered to the executive branch, which has the authority to either approve or reject it, once it has received the approval of both legislative chambers.
The law was passed by the Paraguayan Chamber of Deputies in May of this year with a vote of 40 to 12.
As a result of its growth in the hydro power sector, Paraguay has hopes to establish itself as a center for bitcoin.
The Paraguayan Bitcoin Law and Bitcoin Mining
The measure places a special emphasis on the regulation of cryptocurrencies and gives the Ministry of Industry and Commerce—which is in charge of overseeing the sector nationally—greater authority over the activity.
The National Electricity Administration is also given authority so that it can provide power for mining operations. The National Securities Commission, on the other hand, will be in charge of the commercialization of assets throughout the nation.
Both individual and commercial miners must obtain authorization before using industrial power, according to the law. When they do, a business licence will be issued to them.
The law has been amended to include a change that frames mining firms such that they are excluded from paying VAT taxes. Nevertheless, they will be subject to the income tax system.
According to Fernando Arriola, shareholder and vice president of BC Mining Paraguay, the country’s environment will drastically change if mining is recognised as a separate industry.
There is already a legal loophole in mining and trading because it does not exist as insutria in front of the sub-secretariat of taxation, according to Arriola. “The law would compel users to submit their first and last name.
According to Arriola, they receive requests for quotes from Asian businesses interested in opening up shop in Paraguay each week.
A Chinese enterprise typically needs to invest roughly $200 million or at least 100 MW of energy to operate.
In spite of or because of the lack of backing from governments throughout the world, Bitcoin is still only governed by its own system.