NEW REGULATION WILL HELP PARAGUAY TO DRAW ATTENTION OF CRYPTO MINERS BUT ITS A LONG WAY TO GET TO EL SALVADOR LEVEL!
The legislature has adopted a measure establishing a tax and regulatory framework for cryptocurrency mining in the South American nation of Paraguay. The Senate measure governs companies that conduct mining operations in the country that supports Bitcoin.
The idea was inspired by legislation that Congressman Carlos Rejala and Senator Fernando Silva Facetti created last year with the same goal of regulating bitcoin mining and trade. First, however, President Mario Abdo Benitez must approve for it to become law.
This time, the law mandates that the Ministry of Industry and Commerce (MIC) supervise service providers in the cryptocurrency industry.
The text of the proposed legislation has not yet been made public. Still, according to the website of the Paraguayan Congress, the National Electricity Administration will be in control of electricity delivery, and mining will require MIC approval.
It also states that the Secretariat for the Prevention of Money or Asset Laundering will oversee crypto businesses’ equipment purchases. Sounds like not a huge deal? If it is signed, it is.
To take advantage of its inexpensive and environmentally friendly electricity, miners are moving to Paraguay, and the government wants to turn the country into a hub for the cryptocurrency industry.
The process of adding and validating blocks of transactions to the public blockchain for Bitcoin is known as mining. Due to the high energy requirements and thus high computer usage, it is frequently carried out on an industrial scale.
To obtain 10 MW of green hydropower, the largest Canadian mining company Bitfarms stated last year that it was expanding into the nation on a five-year lease with an annual renewable power purchase agreement.
But even with the new law, Paraguay will lag El Salvador by a few steps. Bitcoin is required to be accepted by enterprises in the Central American nation if they possess the necessary technological infrastructure.
