Why is Paraguay not making Bitcoin legal tender?

There are many rumors and hopes that Carlos Rejala has big Bitcoin plans for Paraguay. However, legal tender status is not on the map of the South American country.

Why is Paraguay not making a legal offer for Bitcoin?

Bukele’s influence on Latin American politicians, including Rejela

Nayib Bukele’s political moves in El Salvador helped the president gain the support of a large part of the crypto industry as the Central American country opened its doors to Bitcoin as legal tender.

Of course, this news caught the attention of several politicians around the world and sparked a wave of pro-bitcoin across Latin America. One of the politicians who quickly jumped on board was Carlos Rejala, a Paraguayan congressman from the Hagamos party.

In early June, a series of tweets from Rejala under observation positioned him as the next politician to push the introduction of Bitcoin as legal tender – Paraguay could become the “next El Salvador”, “Bitcoiners speculated eagerly.

Rejala then set out his plans in more detail and promised to pass a Bitcoin-related bill by mid-July. But lawmakers have since made it clear in an interview with Reuters that they have no intention of attempting anything near a “legal Bitcoin Cash “to pass” law. That is politically “impossible”, he said.

But that hasn’t stopped Rejala from making Paraguay a more “bitcoin-friendly” country, and the bill that would introduce pro-crypto regulation in the country is well underway. In fact, the CEO of Bitcoin.com.py says he is helping with the development, presumably with the support of other active members of the Paraguayan crypto community.

Why is Paraguay not making Bitcoin legal tender?

There are many reasons why it is not necessary for Paraguay to have legal tender for Bitcoin.

Paraguay’s diplomatic, economic, and legal realities are vastly different from those of other countries such as El Salvador or Venezuela, and current conditions are not ideal for changing the country’s stance on Bitcoin and other cryptocurrencies.

Joaquin Fiorio, founder of CriptoPy and CCO of Arapy Network, Paraguay’s first blockchain network, said, “There is something to understand when it comes to cryptocurrency in Paraguay: there is a gray area. [hợp pháp]because they are not managed.

Another important difference, according to Fiorio, is that Paraguay has “one of the most stable fiat currencies in the region and very low inflation”. In other words, it doesn’t need Bitcoin in the same way as El Salvador does. Fiorio says the country’s banks are very conservative and not interested in fixing things that aren’t broken.

Furthermore, unlike El Salvador or Venezuela, where the introduction of cryptocurrencies arguably a necessity from a geopolitical perspective, Paraguay is in a comfortable position on the global chessboard. There is no risk of unilateral sanctions affecting the country’s economy, and its Conservative President is not a problem for the US or its plans for the US. Influence in the region.

And none of that speaks against the very early and limited influence of Carlos Rejala, the young curator.

His party Hagamos has only two of 80 seats in the lower house of the legislature. It is virtually impossible to get the votes needed to pass such laws. “Rejala is unable to pass his bill,” said Fiorio.

Rejala didn’t respond to Decrypt’s request for comment, but lawmakers told Reuters that the point of its bill was to make it so that “Paraguayans or foreigners can legally use these assets”.

Paraguay isn’t making Bitcoin legal, but will Rejela’s law go ahead?

It is unclear what exactly Rejala is trying to “legitimize” as Paraguayan law does not currently explicitly state that buying and selling cryptocurrencies is a crime.

According to Luis Benitez, an open source software activist from Paraguay who was invited by Rejala to a meeting a few days ago to discuss the bill, the law would likely aim to help banking services. This could mean, for example, that crypto assets are kept in custody.

Benitez, who has been in the crypto industry since 2010, said he reviewed Rejala’s first bill at the meeting, which is yet to be presented or published. Benitez said the original design had many flaws that could make it difficult to exist.

“This manuscript seems to me to be one of the most unfortunate documents I have seen on technological issues in the past 10 years,” said Benitez. “It’s not even clear what a wallet is and other important issues; it proposes a cryptocurrency tax and [thậm chí] a fund against losses. “

According to Benitez, the first draft of the bill has been dropped and an updated version is in the works based on feedback from the meeting.

However, there are still some glimmers of hope for Bitcoin loyalists in Paraguay. Trading activity in the country boomed towards the end of the year, and while the peer-to-peer trading scene in countries like Venezuela is not comparable to Bitcoin volume, the peer-to-peer trading scene in the country has been much more dynamic since BTC started trading Cracked $ 20,000. Fiorio claims to have also increased the activity of crypto communities in the country such as Bitcoin Paraguay, Hashpy and Team Mineros Sarambi.

Paraguay also has cheap energy, relatively low taxes, and currently has very little regulation in the crypto sector. Hence, it wouldn’t be a bad place to look for miners looking for a new location to open business.

Rejala and Fiorio agreed on that.

Join our Facebook group and Telegram group Coincu News to chat with more than 10,000 other people and exchange information about the crypto currency market.

Important NOTE: All content on the website is for informational purposes only and does not constitute investment advice. Your money, the choice is yours.