Paraguayan Congressmen Carlitos Rejala and Senator Fernando Silva Facetti are going to introduce a crypto bill regulating cryptocurrencies today.
Cryptocurrencies will be required to register with the country’s Undersecretariat of State Taxation, Decrypt reported Tuesday, citing a draft of the bill it obtained.
“The purpose of this draft law is to establish legal certainty, financial and fiscal in the businesses derived from the production and commercialization of virtual assets,” a translation of the document says. Decrypt reported that the bill was a leaked draft, without revealing the source.
The Hagamos Party’s Deputy, Rejala expressed his desire on Twitter on July 10.
Both Rejala and Facetti envision Paraguay as a crypto hub of the world attracting investors, entrepreneurs, and miners.
That’s why they aim to create a regulated market to provide financial, legal, and fiscal security along with establishing control and supervision mechanisms so that everyone can reap the benefits of digital assets.
The bill would also regulate crypto mining as well as trading through exchanges and peer-to-peer marketplaces where participants will be required to register as “obligated subjects,” according to Decrypt’s reporting.
It is different in this respect from the law passed by El Salvador which has approved Bitcoin as legal tender.
Facetti has opined that the mining of cryptocurrencies is an electro-intensive, capital-intensive, and innovative industry that can create jobs for skilled individuals. They operate in a regulatory loophole that creates uncertainty and illicit activities.
He further said that cryptocurrencies are exported outside Paraguay without registration leading to money laundering. This is evident in the bill.
As per the document, “It is important that companies can register these products within their accounting so that they can have their real valuation, additionally [it] helps to optimize the tax collection of this industry, finally giving traceability of what is produced in the country facilitating its tracking by supervisory authorities.”
Last month, GrupoCinco, an entertainment company based in Paraguay, announced that it would start accepting Bitcoin and Ether for payment from July.
Currently, Latin America is home to two cryptocurrency unicorns Bitso, and 2TM Group, the parent company of Brazilian cryptocurrency exchange Mercado Bitcoin.
Paraguay’s South American neighbor Argentina is also contemplating paying its workers in cryptocurrencies. South America is opening itself to digital currencies due to local economic and fiscal pressures.