Paraguay’s President Vetoes Bill That Would Regulate Crypto Mining and Trading
The bill now heads back to Paraguay’s National Congress, where if it is ratified by both chambers with absolute majorities, it can still be enacted.
Paraguay's President Mario Abdo Benítez fully vetoed a bill proposing to regulate crypto mining and trading in the South American country.
The veto came after recommendations against the bill made by the National Electricity Administration (ANDE), Ministry of Industry and Trade (MIC) and the Paraguayan central bank, according to a presidential release.
The bill will now be sent back to the National Congress where if both chambers ratify it with absolute majorities, it can still be enacted.
In July, Paraguay's Senate approved the bill, after the Chamber of Deputies did the same in May.
The bill calls for putting ANDE in charge of enabling the energy supply for mining, while the Secretariat for the Prevention of Money or Asset Laundering would supervise mining investments carried out by crypto companies. The National Securities Commission would oversee how mining companies would manage the digital assets produced by mining.
In his veto, Abdo cited the opinion of ANDE, which criticized the fact that the bill sets a percentage limit above the industrial rate that be charged to miners, potentially affecting energy providers.
In August, ANDE asked Abdo to partially veto the legislature’s crypto bill and also presented a draft decree to Abdo’s National Economic Team asking to charge a higher tariff to crypto mining companies.
In its recommendation to the executive branch, the Central Bank of Paraguay said that “cryptocurrencies are not backed by any monetary authority and, therefore, their safekeeping is not supervised.” The intention to regulate the industry and trading of virtual assets “could create a false sense of security,” the Paraguayan monetary authority added.
The MIC, for its part, said that the country should concentrate its efforts “on efficient sectors and activities, which at the same time generate economic, social and environmental impact.”
According to Congressman Carlos Rejala, one of the bill’s authors, the bill aims to attract international mining players with the low electricity rates of Paraguay.
Canadian bitcoin miner Bitfarms (BITF) is currently operating a 10 megawatt facility in Villarica, a city located in the south central part of Paraguay.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.