The plan to establish a clear tax and regulatory framework that would enable miners to understand their status while operating in the nation was adopted by the Paraguayan legislature in July. The bill was, however, vetoed by the President because he thinks that the activity consumes a lot of electricity and in return generates very less employment.
This week 33 Paraguayan senators voted on Wednesday to overturn President Mario Abdo Benitez’s veto of the bill that would have regulated Bitcoin mining in the South American nation. Lawmakers like Daniel Rojas think the sector can generate employment if regulated properly. Paraguay is attracting crypto miners because of its low electricity rates.
Lawmakers who vetoed the bill do not think that crypto mining will put a load on the national electricity grid. In fact, they think that the South-American country can become a crypto hub, attracting tourism and thereby generating employment.
Large cryptocurrency companies are aiming to set up shop in Paraguay In order to obtain 10 MW of green hydropower, Canadian mining firm Bitfarms announced last year that it was expanding into the nation on a five-year lease with an annual renewable power purchase agreement.
South America leads the world in cryptocurrency adoption. According to some experts, the reason for these high adoption rates is the fiat currency’ diminished value. By purchasing Bitcoin, residents of Argentina and Chile defend themselves from currency decline. El Salvador’s leadership has often come under fire from the International Monetary Fund for its decision to make Bitcoin, the largest cryptocurrency, its legal tender. The action has allegedly improved financial inclusion and increased tourism, according to the leadership.