This week, Paraguay's President Mario Abdo vetoed a proposed crypto regulation bill entirely, scuppering long-awaited hope that the country might provide a regulatory framework for the commercialization of digital assets.
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The President took objection with crypto mining in particular and said that the industry was marred by "high consumption of energy, with intensive use of capital, and low use of labor." Abdo said that he preferred to limit the electricity rate for mining at 15% above the current industrial rate and said that he wanted to avoid setting up the country for future failure. “If Paraguay wants to intensify crypto mining today, in the next four years it will be forced to import electricity,” his office stated.
The bill had proposed granting a virtual asset mining license to crypto miners and establishing a new government authority to oversee mining operations, which would be able to levy punishment on non-compliant actors and anyone that failed to register.
However, the bill’s sponsor, Senator Fernando Silva Facetti, criticized the president's move on Twitter, saying that crypto and Bitcoin mining currently operated in a legally gray area and the decision not to regulate the industry would only create problems for the sector. Facetti said it denies financial transparency and clear regulations for investors and hundreds of small and medium-sized businesses engaged in work around cryptocurrency.
It "shows the lack of vision of the state. Paraguay will continue to give away its energy to industry in Brazil and Argentina at a lower price than what Paraguayans would pay here," the Senator tweeted.