On Dec. 17, 2021, the Senate of Paraguay approved a cryptocurrency bill introduced in July. The provisions, which define several key terms including virtual assets and call for licenses to mine cryptocurrencies, will now be sent to the Deputy Chamber for further deliberation.

Senator Fernando Silva Facetti, the bill’s sponsor, revealed that it’s passed in the Paraguayan Senate after a contentious debate. According to the senator, the law also aims to foster the growth of crypto mining activities by using the surplus electricity generated in the country.

The body of the legislation includes a definition for virtual assets, tokens, cryptocurrency mining and VASPs (virtual asset service providers). It also grants the Ministry of Industry and Commerce the authority to seek assistance from government bodies outside its boundaries to implement the law.

The bill explicitly states that cryptocurrency mining is a legal activity, noting that:

“Virtual asset mining is a digital and innovative industry. This industry will benefit from all incentive mechanisms provided in national legislation.”

Paraguay reportedly produces more energy than it consumes. As a result, several firms are interested in establishing cryptocurrency mining operations there to exploit this potential surplus.

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