In Paraguay, a disagreement has arisen between the president and the senate over the regulation of Bitcoin mining. The president vetoed a previously approved bill, but it was rejected by the senate last week. The matter now comes to the House of Representatives.
In July, Paraguay voted on a bill to regulate Bitcoin mining. The bill included tax rules, among other things, and would create legal frameworks that would make Bitcoin mining a regulated ??? and therefore legally permitted ??? activity. The aim was to provide clarity so that the sector is no longer in a gray area and can develop further.
The bill was passed, but at the end of August, President Mario Abdo Ben??tez used ??his veto to block the bill. According to him, the mining sector uses a lot of energy, while it generates hardly any new jobs compared to other industries. The economy would benefit too little. The proposal, and therefore regulation of the sector, seemed off the table.
In a remarkable twist, however, the Senate voted last week to override the president’s veto. A total of 33 senators voted in favor. Senator Enrique Salyn Buzarquis explained that he thought it would be better to formalize the sector so that they can tax it. According to Congressman Daniel Rojas, a well-regulated industry does create “new types of jobs.”
The bill will now be submitted to the Chamber of Deputies, which must break the deadlock.
Paraguay
Paraguay, located in South America, is an interesting country for Bitcoin mining. The country has large rivers and generates a lot of electricity from hydropower. For example at the Itaipudam, where one of the largest hydroelectric power stations in the world is located. The approximately 7 million inhabitants of Paraguay themselves consume only a small part of the electricity generated
Most of it is sold to neighboring countries Argentina and Brazil, usually for rock bottom prices. Both countries can more or less determine the price themselves, because Paraguay has no other market. It has been a heated topic for years. According to some Paraguayans, the situation is being abused and it is better to make the power available for Bitcoin mining.
After all, miners have an almost insatiable hunger for cheap energy and Paraguay has that in abundance. They like to buy the electricity below a certain price. Neighboring countries Argentina and Brazil will have to compete with the miners, with electricity prices at a more average level as a result of market forces.
There have been plans for years for the construction of large-scale mining centers at the Itaipu Dam. For the time being, however, these are only getting off the ground in dribs and drabs, perhaps due to the lack of clear regulations. The new bill could change that – if it is approved.
Elsewhere in South America, El Salvador decided to embrace Bitcoin on a national level. There are plans for a Bitcoin city and mining based on energy generated from volcanoes, among other things.