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Despite the Central Bank’s opposition, Paraguay is now set to regulate cryptocurrency

The Chamber of Deputies in Paraguay has approved drafting a crypto regulatory law for submission to the Senate, despite resistance from the country’s central bank. According to The Block, Paraguay’s lawmakers began this process in June 2021 on May 27, 2022.

Paraguay Takes Steps to Regulate Cryptocurrencies Push

Deputies voted 40 to 12 on May 25 to move the bill ahead with revisions during a special session, according to individuals close to the situation. The document will now be handed back to the Senate of Paraguay for further review.

The bill, originally introduced in Paraguay’s Senate in July 2021, proposes regulating digital asset-related economic actions. This would require approving and overseeing crypto-focused enterprises and crypto mining operations in Paraguay. On the other hand, the proposed regulation does not entail making bitcoin legal tender in the state.

Legislators debated the bill extensively before voting, with some citing concerns about Bitcoin’s energy use and its potential use as a money-laundering tool by unscrupulous actors. For example, Deputy Basilio Nunez claimed that the push for crypto regulation would “benefit organized crime” and questioned El Salvador’s use of bitcoin as legal cash.

Congressman Carlos Rejala, on the other hand, was not convinced. “Totally the contrary,” he remarked, stressing that the law will largely focus on digital asset tracking. He also stated that the rule would control the digital asset business rather than making cryptocurrencies legal tender.

Bitcoin remains a source of concern for the BCP

Even though all deputies agreed to move the bill forward, not everyone is enthusiastic about Paraguay’s attempt to regulate the bitcoin business.

It will be recalled that the country’s central bank (BCP) stated in March 2022 that it is unclear whether the benefits of attempting to regulate the digital asset industry would outweigh the disadvantages, which include electrical energy consumption, lack of fame, and price levels for the monetary system, which may be significant.

According to the BCP, crypto-assets do not fulfill the essential capacities of cash, and they represent high-risk investments. They went on to say that the bill’s claimed intent to regulate the industry and commercialize crypto could give people a false sense of security about owning any such asset.

The BCP confirmed this view when central bankers gathered in El Salvador last week to discuss monetary inclusion. Many people anticipated the event would be mostly about bitcoin (BTC), but the bank declared unequivocally that it would not be about cryptocurrencies and had no plans to address them.

The Central African Republic became the world’s second sovereign state to make bitcoin legal cash in April 2022. A growing number of governments worldwide are now accepting bitcoin payments for taxes and other purposes.

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