By
Mayowa Adebajo
February 21st, 2024
Per the law, the bill will return to Paraguay’s legislature for further deliberation. There, the lawmakers will reconsider the proposal and decide on the next line of action.
Current Paraguayan president, Mario Abdo Benítez, has rejected the bill to regulate crypto mining in the nation. The bill introduced in July 2021 by Senator Fernando Silva Facetti was approved by the Senate in December 2021, amid much rancor.
Paraguay generates more energy than it consumes. Leveraging on the surplus energy, Silva hoped to catalyze the growth of crypto mining in the nation. The rejected bill sought to recognize crypto mining as an industrial activity creating jobs. The Paraguayan Senate even set a 15% tax on its related economic activities.
Additionally, the bill defined virtual assets, tokens, cryptocurrency mining and VASPs (virtual asset service providers). It also established the Ministry of Industry and Commerce as the law enforcement agency. However, the president vetoed the bill in its entirety, according to a tweet. According to La Nación, the decision to reject the bill may be because it considered crypto mining an industrial activity.
Presidency: Crypto Mining Doesn’t Compare to Other Industrial Activities
In the president’s opinion, the mining sector does not compare with other industrial activities. The presidential decree noted that while crypto mining was energy-intensive, it required minimal manpower. Thus, crypto mining will not contribute to job growth.
Also, the president argued that mining consumed a lot of electricity and could hinder the future sustainability of the nation’s grid. With industrial investment growing by 220%, further industrial growth seems inevitable.
“If this rate continues, the national industry could require the total amount of energy produced in order to remain sustainable,” It stated. Curtailing the mining industry now is thus seen as a way to forestall the importation of electricity in the future.
Reaction Trails Presidential Decision
Meanwhile, Senator Silva has strongly objected to the president’s bill regarding crypto mining. He pointed out that regardless of regulation, the activity was already existing. Indeed, the nation’s electricity has attracted mining operations.
According to Silva, the nation was refusing to regulate a sector asking for it. Moreso, he added that rejecting the bill “destroys the possibility of the arrival of new investors and the formalization of many companies in the industry.”
Per the law, the bill will return to Paraguay’s legislature for further deliberation. There, the lawmakers will reconsider the proposal and decide on the next line of action.