Paraguay is getting closer to giving the digital currency industry regulatory clarity. The lower house of Paraguay’s bicameral National Assembly, the Chamber of Deputies (Cámara de Diputados), has voted 40-12 in favor of advancing a digital currency industry regulation bill.
The bill, which was first introduced in July 2021, will now proceed with modifications to the Senate for further consideration. Once the Senate approves the law, it will move to the executive for signing. However, the executive is yet to signal if it will sign or veto the bill.
The bill will regulate commercial activities related to digital currencies, including trading and block reward mining. If passed, it will require digital assets firms to get registered with regulators to carry out operations in the South American country.
“The purpose of this law is to regulate the production activities and commercialization of virtual or crypto assets, in order to guarantee legal, financial and fiscal security to the businesses derived from their production and commercialization,” the bill states.
Despite the favorable vote, the proposals in the bill still face opposition. In the Chamber of Deputies debate leading up to the vote, lawmakers raised concern about the electricity usage of block reward mining and uncertainty about money-laundering safeguards.
Countering the concerns, Carlos Rejala, one of the main authors of the bill, stated the law focuses on the traceability of digital assets. The bill is also intended to give regulatory oversight responsibility for the digital assets industry to government parastatals.
Digital currencies will not be a legal tender in Paraguay
One more emphasis the lawmakers made is that the bill will not make digital currencies legal tender in Paraguay. Since El Salvador made Bitcoin legal tender, many other countries, including Paraguay, began to consider the prospect more seriously.
At the time the bill was introduced, Reuters speculated that Paraguay could be the next country to follow in El Salvador’s footsteps. This is especially as the country has been looking to attract international block reward miners to its cheap and abundant power supply.
Notably, the Senate passed a similar bill to the current one back in December 2021. The Senate bill placed the Industry and Commerce Secretariat as the oversight body for the block reward mining industry while tagging the National Security Commission and the Anti-Money Laundering Office to play some roles in the market.
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