Cryptocurrency regulation law declined by Paraguay’s president

Mario Abdo Benitez, president, Paraguay, has rejected a bill to explore cryptocurrency mining as an industrial activity. Benitez said that Bitcoin mining’s high electricity consumption could prohibit the expansion of a national industry, as stated by Cointelegraph.

According to Cointelegraph, the decree stated that cryptocurrency mining makes use of low intensive capital with less manpower usage, and is not expected to generate value in respect of other industrial activities. With cryptocurrency reportedly being one of the largest job creators, the LinkedIn economic graph has shown that cryptocurrency and blockchain based jobs rose 615% in 2021, in comparison to 2020 in the United States. As per senator Fernando Silva Facetti, the law aimed to promote cryptocurrency mining through the use of surplus electricity but the Paraguay government chose to ignore it. On July 14, the Paraguyan senate approved the proposal to recognise cryptocurrency mining as an industrial activity, and established a 15% taxation on its related economic activities.

As per Cointelegraph, on the basis of the document, in the last 12 months, industrial investment grew by 220% in the country to $319 million, while the gross domestic product (GDP) increased more than four percent in the past five years. “If Paraguay wants to intensify crypto mining today, in the next four years it will be forced to import electricity”, the decree said.

Moreover Cointelegraph noted that the bill approved by the senate stipulates that miners are needed to apply for a license and request authorisation for industrial energy consumption. It also made the Ministry of Industry and Commerce as the primary law enforcement authority and the Secretariat for the Prevention of Money or Asset Laundering to regulate cryptocurrency investment companies. Paraguay’s low-energy costs have spurred local and foreign companies to install mining equipment in the country since 2020.

In December, 2021, household electricity costs were $0.058 per kWh and business electricity costs stood at $0.049 per kWh, data from global petrol prices reports stated.

(With insights from Cointelegraph)

Also Read: Bitcoin is expected to become a zero-emission network: Report

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