The Cryptocurrency and Mining Law, which the Paraguayan Congress passed in June, was finally shelved on December 5. The document, which was designed to bring order to crypto mining and exchange activities in Paraguay, was eventually dropped after it failed to get the votes needed to reject the law, receiving a presidential veto.
Paraguayan crypto law dropped after support waned
Paraguay’s cryptocurrency law, introduced in Congress in 2021, was eventually shelved after failing to get the support it needed in the deputy chamber. The project, vetoed by President Mario Abdo in September, failed to gather the necessary votes to overturn the veto.
The veto had previously been rejected by the Paraguayan Senate, which aimed to approve and pass the law without the president’s support. The veto had the support of the Industry, Commerce, Tourism and Cooperatives Commission; while the Commissions for Economic and Financial Affairs and the Commission for Combating Drug Trafficking, Related and Serious Illegal Activities rejected the application.
Some MPs questioned the veto, stating that the cryptocurrency issue needed to be studied and settled because of its importance. In this sense, MP Sebastian Garcia criticized this result, stating that with this move the issue of cryptocurrency will remain in an “absolute informality”.
Reasons for supporting the veto motion
One of the main reasons given by President Mario Abdo and other lawmakers for vetoing this law outright has to do with the statements it makes about the power bestowed on cryptocurrency miners. Abdo explained that cryptocurrency mining is an activity that has “a high consumption of electrical energy but little labor input.”
The law also placed limits on the fees crypto miners pay for the energy supplied to their operations. This would clash with the National Power Administration’s (ANDE) method of setting electricity tariffs, an organization that also backed the veto measure after finding several cryptocurrency farms illegally connected to the grid.
MP Arnaldo Samaniego argued that denying the veto motion would put ANDE in a difficult position, facing potential losses of up to $30 million. Rep. Jose Rodriguez also supported this position, stating that the organization could not operate at a loss from this law.
This development brings the cryptocurrency regulation effort in Paraguay back to square one as lawmakers once again have to propose and debate a hypothetical new cryptocurrency law.
What do you think of the ultimate fate of cryptocurrency and mining law in Paraguay? Tell us in the comment section below.
photo credit: Shutterstock, Pixabay, WikiCommons
Disclaimer: This article is for informational purposes only. It is not a direct offer, or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.