The Paraguayan Senate has approved a bill that allows companies in the country to use excess electricity for mining. The document may come into force as early as 2022. What does it mean for the development of cryptocurrencies and will Paraguay follow the example of El Salvador, the first country to officially recognize Bitcoin?
Innovation Law
The bill, already approved by the Senate, involves regulating not only mining, but also all cryptocurrency transactions. The law recognizes these types of activities as separate sectors of the economy. As for miners, companies in the country who want to mine cryptocurrencies are planned to be provided with constant access to electricity so that they can mine digital assets without any problems. This opportunity is given to them in light of the fact that in Paraguay there are no problems with electricity and, on the contrary, there is an excess of electricity.
Source:twitter.com
At the same time, in order to engage in mining, citizens of the country must obtain special permission and a license for this type of activity - and this applies to both individuals and legal entities. If the law is finally adopted in 2022, then control functions will be assigned to a number of departments at once, including the National Securities Commission of Paraguay and the country’s Electricity Authority. Those wishing to engage in mining will have to submit applications to the Securities Commission, which will also set requirements for participants in this market.
Why is this important?
Such legislative initiatives are very important for Paraguay, since the country is ready to host a large number of miners from China who are looking for favorable places to move after the Chinese authorities banned operations with cryptocurrencies, including mining.
Previously, Chinese miners complained that there is no may consider Paraguay as a place of their relocation, since there is no appropriate legislative framework for this type of activity.
Example of El Salvador
El Salvador became the first country in the world to officially recognize Bitcoin as a payment instrument. The country's authorities are also going to mine cryptocurrency using volcanic energy and create a “bitcoin city” - a cryptocurrency city in which residents will mine cryptocurrency and not pay taxes on profits.
Regulation of mining and cryptocurrency transactions in a separate country is literally a step away from the official recognition of a particular cryptocurrency. Considering the initiatives of Paraguay, it cannot be ruled out that this country may follow the example of El Salvador. This will increase the prevalence of cryptocurrencies and will be another step towards their official recognition around the world.
Author: Dmitry Noskov - expert of the StormGain crypto exchange (platform for trading, exchanging and storing cryptocurrency)
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