What Should You Know About Paraguay's Latest Bitcoin Bill?

El Salvador started the first domino of state-wide Bitcoin adoption. And now, Paraguay is seeking to leverage the country's infrastructure for Bitcoin mining. It has categorically stated that this new Bill doesn't mean that BTC will become a legal tender, as is the case in El Salvador. However, this is a huge leap towards encouraging the adoption of cryptos and encouraging blockchain-related businesses in the country.

With the local economic and financial pressures, especially in Argentina, Venezuela, and Mexico, Latin America is becoming a stronghold for cryptocurrencies. Paraguay's plan is to attract mining companies.

The primary goal of the Bill is to regulate every aspect of crypto production and commercialization. It aims to achieve this by establishing an 'Application Authority' whose mandate will be to oversee ICOs, IEOs, IDOs, or any such public offering of digital assets. This move is set to bring all crypto operations under a regulatory fold to eliminate money laundering and supervise the countries' electrical needs concerning crypto mining.

The Bill is set to legalize the use of cryptocurrencies as a means of payment in Paraguay. It stipulates that any transaction can be made within the country using Bitcoin. The state will promote and train the various sectors to access this new form of electronic payments.

The congressman revealed earlier this month that he is working with Bitcoin.com.py CEO Juanjo Benitez Rickmann and 'the Paraguayan crypto community to make Paraguay a hub for the world's crypto investors and subsequently one of the frontrunners of digital technology.'

Paraguay's Congressman Carlitos Rejala and Paraguayan Senator Fernando Silva Facetti introduced a Bitcoin (BTC) bill to Congress on Wednesday, July 14, emphasizing the need for lawmakers to formulate a coherent digital strategy for their home country. A draft law has already been submitted to several Paraguayan government agencies, including the competent anti-money laundering office.

'I plan to unite Paraguay,' Rejala tweeted, adding that he and his colleagues were planning a 'mega-surprise in Paraguay and around the world.'

Rejala is currently trying to win support to achieve the required majority of 41 votes in the Chamber of Deputies and to forward the Bill to the Senate Chamber. If both chambers agree, the country's president has the last word to put it into effect. But he can also veto the draft. Depending on the outcome of the vote, the following steps are decided.

The first requests for free places for mining have already been received. Benitez Rickmann reported that during the Bitcoin conference in Miami from June 4 to 6, 2021, he had some promising conversations with interested parties from China who asked for capacities of 100 megawatts.

Carlos Rejala's Bill aims to position Paraguay as a crypto hub for Latin America and act as a model for the neighboring states. Local business leaders have been pursuing this goal since 2018. Even then, they floated around the advantages of cheap energy in the country.

With about 74% energy surplus, the country Paraguay has enough free resources to carry out Bitcoin mining on a large scale. Since almost 100% of the energy is generated from hydropower, the idea of sustainability plays into the hands of Paraguayans in addition to the low electricity prices.

With the help of a bill, Carlos Rejala wants to take the first steps towards crypto-friendliness in his country. Suppose his proposal receives the necessary approvals from the individual chambers of parliament and the president. In that case, he and his supporters can plan the next step and make Bitcoin the official means of payment.

$0.05 per kilowatt-hour should be incentive enough for large mining farms to settle in the heart of South America. And the best part is that nearly 100% of electricity production comes from hydropower. The main part of this is the Itaipú dam in the southeast of the country.

Paraguay currently shares the energy generated with Brazil. But the country needs just over a quarter of its share of 6,067 megawatts per month itself.

It stands to reason that the oversupply of electricity should be used elsewhere and, above all, more profitably in the future. The draft law is intended to pave the way for this. Paraguay would also be an excellent opportunity for mining companies to polish up the 'dirty' image of mining new Bitcoin.

Paraguay and El Salvador show the world how cryptocurrencies can find their way into states. These developments show the rest of the world how comparatively easy it can be to introduce Bitcoin as an official currency. However, it remains to be seen how much BTC finds adaptation. Let's face it - in the end, the rampant volatility in cryptocurrencies makes them unsuitable for transactional purposes. That is probably why Paraguay's first step has been to classify Bitcoin as an asset.

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