Paraguay’s bitcoin situation

By BKM | Berkemeyer

After El Salvador became in June 2021 the first country in the world to adopt bitcoin as legal tender, a new bitcoin law was expected to be discussed shortly in Paraguay. Lawmaker Carlos Rejala announced on Twitter that he would be introducing a bill in the country’s National Congress in July that would likely mirror El Salvador’s cryptocurrency law.

However, that is still not the case, as Congress members continue negotiations to decide which focus should the new legislation have. The early draft looked to give legal, financial and fiscal certainty in the businesses derived from the production and commercialization of virtual assets, while also regulating crypto mining through exchanges and peer-to-peer marketplaces where participants will be required to register as obligated subjects, according to a Decrypt’s report.

Rather than establishing bitcoin as a legal tender like El Salvador, Paraguay looks to establish it as a property, which would require bitcoin miners to obtain government licenses for their operations.

Currently Paraguay is to receive large investments to install 500,000 Bitcoin miners, as at least eight Chinese economic groups have expressed their interest in relocating their operations to the South American country thanks to its favorable legislation.

According to a report from Ambito, the exodus of Bitcoin miners from China to Paraguay and the bill to regulate the mining of digital assets in the country could trigger large-scale investments in the near future.

Paraguay could receive more than 500,000 cryptocurrency miners in three years if it consolidates its friendly policy towards the cryptocurrency industry, Ambito said.