Paraguayan President Mario Abdo Benítez shuts the door for cryptocurrency regulation laws.
Mario Abdo Benítez, President of Paraguay who took office in 2018, has vetoed a law that sought to regulate various cryptocurrency-related activities, including crypto mining.
According to the decree shared on August 30th, one of the main reasons why Benítez objected to the law is that the crypto mining industry is characterized by high electricity consumption.
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The Paraguayan president noted that the high electricity consumption “could compromise the development and expansion of an inclusive and sustainable national industry.” According to Benítez, if the crypto mining industry continues to grow, the country will be forced to import electricity at some point.
On top of that, the president remarked that the decision was made after consultation with the Paraguay central bank. The institution highlighted that crypto mining uses extensive amounts of capital and “low use of manpower”, which according to the president, does not generate any additional value.
Based on the decree, cryptocurrency trading is not backed by any authority in the country, therefore, it is unsafe. Moreover, it states that “crypto-assets do not fulfill basic money functions and constitute high-risk investments.”
After the rejection of the cryptocurrency regulation law, its initiator Senator Fernando Silva Facetti, took to Twitter to share his disappointment.
Facetti claimed that this veto made little sense, as a significant number of crypto miners are already operating in Paraguay. However, due to this veto, they will be forced “to operate in a grey area, without being able to enjoy access to the financial system or build in investor protection guarantees.”
It is worth mentioning that The Paraguayan Senate approved the bill on July 14th. At that time, the law sought to impose regulations on crypto exchanges, mining, intermediation, commercialization, transfer, and crypto asset administration.
After Mario Abdo Benítez's veto, the bill is returning to the Senate and the Lower House. The Paraguayan lawmakers are obligated to determine whether to leave the original proposals or approve the presidential veto.