Paraguay’s Chamber of Deputies has voted to pass the crypto regulation bill with some modifications, despite the central bank’s reservations.
Last July, the bill was first introduced by members of the Senate to regulate commercial activities related to virtual assets in Paraguay. It also covers the licensing and regulation of crypto mining activities in the country.
While the Senate had initially approved the Bill in December 2021, the recent modifications made by the Chamber of Deputies will require the Senate to revisit the Bill before sending it for presidential assent.
The deputies voted on the bill on May 25 with 40 in support, while 12 voted against it. The bill will return to the Senate for more deliberations on the decision.
The bill will not make crypto a “legal tender”
The bill itself will not make crypto a legal tender in the country, which the BCP continues to emphasize.
“The purpose of this law is to regulate the production activities and commercialization of virtual or crypto assets, in order to guarantee legal, financial and fiscal security to the businesses derived from their production and commercialization,” the bill reads.
Nevertheless, lawmakers have described this latest development as a “big leap” for crypto in Paraguay.
The second chamber of Congress just approved the bill proposal for creating a legal framework for bitcoin mining. “One-hundred percent hydroelectric renewable power,” said one of the bill’s supporters, Carlitos Rejala in a tweet.
Paraguay’s central bank skeptical?
Paraguay’s Central Bank (BCP) has been a major critic of the crypto industry over time. Back in March, the bank released its analysis, questioning whether the benefits of regulating crypto are worth the disadvantages it would bring to Paraguay.
It provided examples of what it considers “disadvantages,” which included “electricity consumption, loss of reputation and costs for the financial system.” Additionally, BCP argued argued that crypto assets don’t function as money, but rather are high-risk investments.
“Crypto assets do not fulfill the basic functions of money and constitute high-risk investments,” the BCP wrote in its analysis. “The intention to regulate the industry and commercialization of virtual assets, as intended in this bill, could generate a false sense of security regarding the holding of this type of asset.”
Last week, BCP reiterated its position, refusing to discuss crypto at its meeting in El Salvador, warning attendees that its not a legal tender in the country.
As more Latin American countries continue exploring ways to regulate crypto, this bill could provide further clarity in the international market.
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