Paraguay president vetoes crypto regulation bill

Mario Abdo Benítez rejects legislation over high energy costs of crypto mining

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Senator Fernando Facetti laments president’s decision - Photo:Shutterstock
                                

The president of Paraguay, Mario Abdo Benítez, has vetoed legislation regulating cryptocurrencies in the South American nation. 

The bill, introduced by Senator Fernando Silva Facetti in July 2021, received the approval of the Paraguayan senate in December, despite heated opposition.

According to Portalo de Bitcoin, President Benítez said that cryptocurrency mining “requires a high level of electricity consumption that could compromise the development and expansion of an inclusive and sustainable national industry.” 

After taking advice from the nation’s central bank, the president said that through its “intensive use of capital and low use of manpower”, mining “does not generate added value” for the economy. 

The legislation began life as a private member’s bill and was created in collaboration with Paraguayan crypto miners, who sought to use the surplus energy generated by the country’s hydroelectric plants. 

Facetti laments decision

Senator Facetti, lamenting the veto, observed that crypto mining in Paraguay would continue to operate in a grey area without regulatory oversight and with miners unable to access the financial system. 

He said that the decision “destroys the possibility of the arrival of new investors and the formalization of hundreds of small and medium-sized companies that live in and depend on this industry.” 

Benítez stressed that he chose to reject the bill after seeking advice from the nation’s central bank, its ministry of trade and the national electricity administration. 

The veto will disappoint the world’s cryptocurrency investors and entrepreneurs. Only this week, the most read Spanish language newspaper online, El País, published an article asking: “Is Paraguay the next cryptocurrency Mecca?” 

The decision is the latest demonstration of the vast divergence in attitudes towards cryptocurrencies within Latin America. While the government of El Salvador has adopted bitcoin as legal tender, authorities in Argentina have attempted a crack-down as inflation-hit Argentines flocked to digital assets.

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