Paraguay President Mario Abdo Benítez: Mining Cryptocurrencies Cannot Be Compared To Other Industry

Crypto mining in Paraguay. (Inside Bitcoin)

JAKARTA The government of Paraguay is trying to regulate domestic crypto mining. However, President Mario Abdo Benítez rejected the bill that was introduced in July 2021 and was approved by the Senate at the end of 2021. For information, the crypto mining bill was submitted by Senator Fernando Silva Facetti.

Launching Coinspeaker, Paraguay generates more energy than is consumed. Taking advantage of excess energy, Silva hopes to catalyze the country's crypto mining growth. The bill that was rejected seeks to recognize crypto mining as an industrial activity that creates jobs. The Paraguay Senate even set a 15% tax on related economic activities.

In addition, the bill defines virtual assets, tokens, cryptocurrency mining, and VASP (virtual asset service providers). The bill also forms the Ministry of Industry and Trade as law enforcement agencies. However, the president vetoed the bill in its entirety, according to a tweet. According to La Nación, the decision to reject the bill may be because he considers crypto mining an industrial activity.

President Benítez himself considers that cryptocurrency mining cannot be compared to other industrial activities. Although mining activities consume more energy, it uses very little manpower. That way, cryptocurrency mining will not play a major role in growing jobs.

On the other hand, the president argues that mining consumes a lot of electricity and could hamper the sustainability of the country's future power grid. With industry investment growing by 220%, further industrial growth seems unavoidable.

"If this rate continues, the national industry could require the total amount of energy generated to be sustainable," said President Benítez.

That way, actions to limit the crypto mining industry are currently claimed as a way to prevent future electricity imports.

Meanwhile, Senator Silva has the opposite opinion. According to Silva, the state's rejection of the regulation on the crypto mining sector will "disrupt the possibility of new investors arrival and formalize many companies in this industry."

By law, the bill will return to Paraguay's legislature for further discussion. There, lawmakers will reconsider the proposal and decide on further action.

The crypto mining sector does require more energy because the use of computing devices is high. Previously, Kazakhstan had attracted the interest of global crypto mining companies. However, shortly after they operated in the country, Kazakhstan experienced an energy crisis that forced crypto mining companies to leave.

In addition, El Salvador, which has officially adopted Bitcoin as an official payment option, has set up a Bitcoin mining center using volcanic energy.