Regulation of the crypto asset market is advancing in Latin America. In addition to countries like Brazil, which is discussing a law for the sector, Paraguay recently passed legislation that even addresses mining activity.
The vote on the regulation took place on July 14, 2022. The bill was considered by the senators, who approved the proposal that must go forward for presidential sanction.
Before being voted among the senators, the federal deputies approved the bill regulating the crypto market in Paraguay. The Ministry of Industry and Trade will be the body responsible for regulating and supervising crypto asset products in the country.
Considered a large electricity producer, Brazil’s neighboring country intends to attract mining companies. As such, the legislative proposal has included an energy use plan for the activity.
As such, crypto asset mining companies must submit a usage plan for electric power for the sector that manages the resource in the country. Companies that do not follow this rule may face interruption in their activity.
Mining will be regulated in Paraguay
Paraguay also establishes that mining companies must pay for electric power consumption in advance. Therefore, payment will happen according to the resource use plan.
However, as far as taxation is concerned, the new law establishes that value-added tax (VAT) will not be charged to companies operating in the sector. However, these businesses will be subject to income tax.
With the approval in the Senate, it will be up to the president of the country, Mario Abdo Benítez, to decide on the regulation of the crypto market. In other words, while in Paraguay the bill goes to presidential sanction, in Brazil, the proposal to regulate the sector is being considered by the House of Representatives and will then go to presidential sanction if the bill is approved.