Cryptocurrency in the South American nation of Paraguay could be facing new rules in the new year.
The measure was approved by Paraguay’s Chamber of Senators last summer. Under the legislation, virtual assets are defined, and a license would be required to mine cryptocurrencies. It will now be considered by the country’s Deputy Chamber.
The legislation is supported by Sen. Fernando Silva Facetti. He said the law is intended to recognize mining of virtual assets as an industry; establish the grounds to guarantee access to energy and requirements that promise to formalize the burgeoning sector.
Lawmakers said the law defines tokens, cryptocurrency mining, and virtual asset service providers. If passed, it would provide additional powers to regulate the industry to the Ministry of Industry and Commerce, a governing agency which would be funded by other organizations in the country to implement the law.
The bill would legalize cryptocurrency mining and recognize
virtual asset mining as a “digital and innovative industry.” This industry, the measure said, “will benefit from all incentive mechanisms provided in national legislation.”
It’s no wonder Paraguay is seeking to establish crypto rules. The country produces more than five times the energy it uses. As a result, companies are examining the possibility of commencing cryptocurrency mining operations there. Proponents say the bill would not only clarify this new sector, but it would also require authorization to use industrial electricity by the National Administration of Electricity, and a license must be issued by the Ministry of Industry and Commerce.
For investors and traders, the law says companies and individuals must be licensed for trading or providing custody of cryptocurrencies to third parties.
Facetti said he expects the bill to be considered by the Deputy Chamber next year, where he hopes it will be discussed with public and private companies.