Recently, a law that sought to regulate cryptocurrency mining and trade in the South American nation of Paraguay was completely rejected by President Mario Abdo Benitez.
According to a presidential announcement, the National Electricity Administration (ANDE), Ministry of Industry and Trade (MIC), and Paraguayan national bank all recommended against the policy.
The bill is now expected to be sent back to Paraguayan’s National Congress where it will be once again voted for approval in congress.
The Cryptocurrency Mining Bill
The proposed legislation would assign the National Electricity Administration the party responsible for permitting the energy supply for cryptocurrency mining.
The Secretariat for the Prevention of Money or Asset Laundering would be in charge of monitoring mining investments made by cryptocurrency businesses. And the management of the digital assets generated by mining would be regulated by the National Securities Commission.
Why It Was Vetoed
The Paraguayan President chose to follow ANDE’s opinion that the legislation would set a percentage limit rate above the present industrial rate charged to miners, which could possibly affect Paraguay’s energy provides.
In August, ANDE filed a draft decree to Abdo’s National Economic Team, requesting that a higher tariff be applied to cryptocurrency mining businesses.
Additionally, the Government branch responsible for Paraguay’s electricity administration urged Abdo to partially veto the legislature’s crypto law.
The Central Bank of Paraguay also claimed doubts about the proposed bill.
“Cryptocurrencies are not backed by any monetary authority and, therefore, their safekeeping is not supervised.” Paraguay’s Central Bank wrote. “The intention to regulate the industry and trading of virtual assets “could create a false sense of security.”
Now the bill will go back to congress where Paraguay’s congressmen can reiterate and modify the legislation in order to satisfy the federal government.
