Paraguay has come one step closer to regulating cryptocurrency

The Paraguayan Senate has passed a law regulating the local cryptocurrency industry.

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On December 17, 2021, the Paraguayan Senate approved a cryptocurrency law introduced in July. The terms, which define several key terms, including virtual assets and the requirement for licenses to mine cryptocurrencies, are now being sent to the deputy department for further review.

Senator Fernando Silva Facetti, the sponsor of the bill, announced that it was passed after a heated debate on homosexuals in the Paraguayan Senate. The law also aims to encourage the development of cryptocurrency mining operations using excess electricity generated in the country, according to the senator.

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The law includes definitions for virtual assets, tokens, cryptocurrency mining and VASP (Virtual Asset Service Provider). It also gives the Ministry of Industry and Commerce the power to seek assistance from government agencies outside its borders in implementing the law.

The bill specifically states that mining cryptocurrencies is a legal activity and states that:

“Virtual asset mining is a digital and innovative industry. The industry will benefit from all the incentives provided for in national legislation. “

According to the report, Paraguay generates more energy than it consumes. As a result, some companies are keen to build crypto mining operations there in order to exploit this potential surplus.

Related: Bulk Adoption Comes As South America’s Second Largest Company Accepts Crypto Payments

In July, Paraguayan Congressman Carlos Rejala and Senator Fernando Silva Facetti presented the Bitcoin (BTC) law to the National Assembly, demonstrating the legislature’s commitment to formulating a comprehensive digital asset policy for their country. The law has now been passed by the National Assembly and is due to be discussed in the House of Representatives in 2022.

Due to local economic and financial challenges, particularly in Argentina, Venezuela and Mexico, South America has become a potential hotspot for the introduction of cryptocurrencies. For example, when their national fiat currencies collapsed, Argentines and Venezuelans turned to digital alternatives like Bitcoin as the more viable payment option. Others, like El Salvador, have taken a very different approach, with the president encouraging people to use BTC.