President of Paraguay vetoes crypto regulation law
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Loading... - william harrison
- 13 Sep 2022
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Paraguay’s president, Mario Abdo Benítez, vetoed a bill that sought to recognize cryptocurrency mining as an industrial activity on Monday. He reasoned that mining’s high electricity consumption could hinder the expansion of a sustainable national industry.
The decree stated that crypto mining uses intensive capital with low manpower usage and, therefore, would not generate added value on par with other industrial activities. Around the world, cryptocurrency is one of the largest job creators. LinkedIn’s Economic Graph shows that crypto and blockchain jobs listing rose 615% in 2021 compared to 2020 in the United States.
In accordance with the bill’s sponsor, Senator Fernando Silva Facetti, the law aimed to promote crypto mining through the use of surplus electricity, but the Paraguayan government chose to ignore the activity in the country:
The Paraguayan Senate ultimately approved the proposal on July 14, recognizing crypto mining as an industrial activity. They established a 15% tax on its related economic activities, but the decree sees the brackets as an indirect incentive to the industry. It says:
“By subordinating the rate applicable to the users of crypto miners to just a small percentage above the current industrial rate, an indirect industrial incentive would be offered to crypto mining.”
According to the document, in the last twelve months, industrial investment grew by 220% in the country to $319 million, while the GDP increased more than 4% in the past five years. If this rate continues, the national industry could require the total amount of energy produced and available in the country in order to remain sustainable.
“If Paraguay wants to intensify crypto mining today, in the next four years it will be forced to import electricity,” the decree said. Read More…
