A group of Paraguayan lawmakers tabled a “Bitcoin law” in the National Congress last week, but it turned out to be a very different proposal from what crypto supporters had expected. The bill aims to control and regulate cryptocurrency transactions and set taxes. Nowhere in the proposal is there any mention of declaring Bitcoin or other cryptocurrencies as legal tender.
“Bitcoin Bill” presented in Paraguay
The long-hyped “Bitcoin Law” was finally presented to the National Congress by two legislators in Paraguay last week, but it wasn’t what some expected. The project presented by MP Carlos Rejala and Liberal Senator Fernando Silva Facetti does not aim to make Bitcoin legal tender, as El Salvador did last month. In fact, it says the opposite. In an early draft it says:
“Digital assets are not legal tender used by the Paraguayan state and for this reason they are not supported by the Central Bank of Paraguay”
Instead, the proposed law aims to regulate crypto transactions for the state to levy taxes on trading and other use cases. The law provides the Central Bank of Paraguay as the controller of all institutions that have to do with cryptocurrencies. Facetti said when asked about the direction of the proposed law:
This is not legal tender, this is a commodity and the purpose of the law is to regulate and control this industry. This is the basic project that we really have today.
Mining and trade also regulated
The law also mentions Bitcoin mining and trading as activities within its scope. Mining-related imports are taxed at 5% which is a total sales tax if the project is approved. In addition, cryptocurrency traders must be licensed annually and government institutions to be created will keep records of this. In the project it says:
“Every person whose main activity is that of a trader must have a power of attorney issued by a competent authority, which enables him to carry out consultations or transactions under a mandate or an administrative contract.
The law describes penalties for non-compliance with these mandates, but does not specify the forms of these penalties. If the law is approved, the law would give miners a deadline to register with the government and obtain operating licenses. In conclusion, the law mentions the creation of the Digital Securities Fluctuation Reserve Fund, which would help traders lose the digital assets in the market.
What do you think of the newly proposed Paraguayan “Bitcoin bill”? Let us know in the comments section below.
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