Paraguay’s president vetoes proposed crypto industry regulation

Quick Take

  • President Mario Abdo Benítez of Paraguay vetoed a highly anticipated bill that would regulate crypto mining and other commercial activities related to digital assets. 
  • The denial seems to center on a condition that electricity rates for crypto mining be capped at 15% above the current industrial tariff. 

Paraguay’s president vetoed a bill that would regulate commercial activities related to digital assets, including crypto mining. 

President Mario Abdo Benítez voted down the bill in full, according to an August 29 tweet from Paraguay’s official presidential Twitter account linking to the vetoed proposal. Spanish-language outlets including La Nación and Infobae also reported the news.

Abdo's decision to veto the bill appears to center on a condition that crypto mining be recognized as an industrial activity with an electricity rate capped at 15% above the current industrial tariff, La Nación reported.

Fernando Silva Facetti, one of the senators who introduced the crypto bill in July 2021, strongly objected to the president’s decision in an Aug. 30 statement. In Silva’s view, the veto “ignores the existence of this activity that today functions in the regulatory shadows.” The crypto mining industry operates in a legal gray area and cannot access the country’s financial system, yet generates jobs and resources, the senator said.

The bill will go back to both chambers of Paraguay’s legislature, Infobae reported, where lawmakers can reconsider the proposal or accept the veto.

Félix Sosa, president of Paraguay’s National Electricity Administration (ANDE), told a local news station earlier this month that he would ask Abdo for a partial veto of the bill. He questioned whether the 15% cap would be enough to cover the costs of energy consumption, alleging that “illegal connections” in the country’s crypto mining sector had been causing economic losses. To solve that, Sosa said ANDE is looking to have crypto mining companies pay for their electricity usage in advance with U.S. dollars.

Paraguay’s Senate passed the crypto bill one last time on July 14 before sending it to the president’s desk. The proposed law, which previously cleared the country’s Chamber of Deputies in May, faced pushback from the country’s central bank over concerns, which include electricity consumption. 

The bill, as submitted to the president, focused on “regulating the activities of mining, commercialization, intermediation, exchange, transfer, custody and administration of crypto assets or instruments that allow control over crypto assets, in order to guarantee legal, financial and fiscal security to the businesses derived from its generation and commercialization.”

 


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