The President of Paraguay – Mario Abdo Benítez – has vetoed a bill for the regulation of cryptocurrency mining, possibly turning it into an industrial activity. The reason seems to be the high electricity consumption. Over the past few months, Paraguay has made significant steps toward the digital asset class. Reports suggested that the South American country might follow El Salvador and make bitcoin legal tender. At the end of 2021, the Senate approved a bill that could have regulated and promoted cryptocurrency trading and mining activities.
Paraguay’s President gave his total veto on the bill that could have regulated cryptocurrency mining, as well as allowing the commercialization, intermediation, transfer, exchange, custody and administration of digital assets. He argued that crypto mining operates in a gray area and it also uses a considerable amount of energy which could harm Paraguay’s national electricity network output.
However, President Benítez noted that the cryptocurrency industry generates high-value resources and creates job opportunities for numerous individuals. It is worth of note that the Paraguayan Senate greenlighted the bill in July as it also sought to enforce a 15% tax rate on cryptocurrency miners. Nonetheless, the final word was left to the President who has given his own decision.
Last summer, Paraguay’s Deputy of the Nation – Carlos Antonio Rejala Helman – stated that the current administration will focus its efforts on an important project that included Bitcoin and PayPal. According to rumors, the country’s goal was to make the primary cryptocurrency an official payment tender within its borders (similar to El Salvador).
However, the country did not follow through with those plans. One of those who was opposed the move was the prominent economist and strong critic of the crypto industry – Steve Hanke. Last year, Steve claimed that the debates which resulted from El Salvador’s move made Paraguay’s authorities think twice and reverse their decision.
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