Legislators in Paraguay have been debating a complete legislative crypto framework that takes businesses and dealers into account for a year.
On July 14, the Paraguayan Senate approved a bill creating a tax and regulatory crypto framework and crypto mining companies.
The legislation, proposed by Senator Fernando Silva Facetti in July of last year and approved by Congress in May before moving on to the Senate, presents for the establishment of the Ministry of Business and Commerce (MIC) to regulate service providers to the cryptocurrency industry. President Mario Abdo Bentez is just one step away from signing the bill into law.
The measure explicitly relates to crypto mining, commercialization, intermediation, exchange, transfer, custody, and/or administration of crypto assets or instruments that enable control over crypto assets, according to a notice from Congress in May.
According to a July 14 article by the regional news source ABC, businesses engaged in the cryptocurrency sector will be taxed similarly to those who deal in securities. As a result, the Undersecretary of State for Taxation will exempt them from paying Value Added Tax (VAT), but they will still be subject to income tax.
According to reports, the bill for the crypto framework takes into account how crypto miners ought to deal with regional power providers. The National Power Administration (ANDE), Paraguay’s national electricity administration, will need to know the energy consumption schedule of any prospective mining operations. ANDE has the right to stop providing electricity to miners if it is discovered that they are using more than anticipated.
Despite the fact that the bill calls for subsidies for miners’ energy expenditures, they would nevertheless pay a rate that is 15% higher than that of other industries.
Senator Facetti reportedly stated that the changes made to the measure over the previous year “enhanced the basic proposal.”
Senator Enrique Bacchetta, one of the bill’s opponents, allegedly said that while regulating the cryptocurrency industry might increase profits, he doubted whether it would ultimately result in more jobs for his fellow people. Senator Baccetta’s worries were echoed by Senator Esperanza Martinez, who noted that the energy consumption rate of miners much outweighs the number of employees they would generate.
This advances the adoption and regulation of cryptocurrencies in Paraguay, making it the most recent LATAM country to do so. In 2021, El Salvador made Bitcoin (BTC) a legal tender, while countries in Brazil, Argentina, and Panama are all developing their own cryptocurrency laws.
