On December 5, the law governing cryptocurrency and mining that the Paraguayan Congress passed in June was finally put on hold. The proposal, which aimed to regulate cryptocurrency mining and exchange in Paraguay, was ultimately abandoned because it lacked the necessary support to override the president’s veto.
Paraguayan Crypto Law Abolished After Declining Support
The Paraguayan cryptocurrency law, which was first proposed in Congress in 2021, was ultimately abandoned because it lacked the necessary support in the Deputy Chamber. The project, which President Mario Abdo vetoed in September, was unable to secure the necessary number of votes to override this veto.
The Paraguayan Senate had previously overruled the veto in order to pass the legislation without the support of the president. While the Economic and Financial Affairs and the Fight against Drug Trafficking, Related and Serious Illicit Activities commissions rejected the motion, the Commission for Industry, Commerce, Tourism, and Cooperatives supported the veto.
Some deputies questioned the veto, arguing that given the significance of the cryptocurrency issue, it needs to be researched and regulated. Deputy Sebastian Garcia expressed disapproval of this outcome, saying that it will keep cryptocurrency discussions in a “completely informality.”
Arguments in Favor of the Veto Motion
The decisions this bill makes regarding the power provided to cryptocurrency miners is one of the main arguments used by President Mario Abdo and other deputies to exert a complete veto on it. According to Abdo, mining cryptocurrencies involves “high electrical energy consumption, but little labour use.”
Additionally, the law set restrictions on how much cryptocurrency miners can charge for the electricity used in their operations. This would conflict with how the National Power Administration (ANDE), a company that also supported the veto measure after discovering several cryptocurrency farms that were improperly connected to the power network, determines power tariffs.
Arnaldo Samaniego, a deputy, argued that ANDE would be in a difficult situation and could suffer losses of up to $30 million if the veto motion were to be upheld. Jose Rodriguez, a deputy, agreed and argued that the organisation could not continue to operate while suffering losses as a result of this law.
This development forces legislators to once more put forth and discuss a potential new cryptocurrency law, effectively starting the regulation of cryptocurrencies in Paraguay over from scratch.