- A disclosed version of
ParaguayThe next crypto bill could put an end to speculation about its crypto usability.
- The bill aims to give crypto mining the same status as other industrial activities.
- He also wants crypto companies to register with the government in order to track, trace and tax these transactions.
The hype around Paraguay becoming the second country to legalize Bitcoin has intensified since
Instead, it focuses on regulatory competence, especially when it comes to taxation. The project, first reported by Decrypt, requires all crypto companies to be registered with its Undersecretary for State Taxation.
Tax on crypto mining and crypto trading
While the bill is drafted in Spanish, a rough translation of the document indicates that the country is establishing the law to “establish legal, financial and fiscal security in businesses derived from the production and marketing of virtual assets.”
The bill aims to regulate both mining and crypto trading in Paraguay, and will require companies to register as “mandatory subjects.”
The document suggests that unlike El Salvador, Paraguay has many of the same concerns that some other countries have had with crypto businesses – that of taxation. The country apparently wants to ensure that crypto companies are subject to its tax regime from the start and wants to have traceability for those transactions and investments.
The bill also wants to give crypto mining the same status as industrial activity, and place it under the supervision of its Ministry of Industry and Commerce.
Lessons from El Salvador
While the regulations can be seen as a positive development, Paraguay can take inspiration from the issues Salvador’s decision faces from its own announcement – the same announcement that prompted Rejala, 36, to announce his intention to make the move. Paraguay, the cryptographic center of Latin America.
Como ya lo decía hace un buen tiempo, nuestro país necesita avanzar de la mano de la nueva generación.Llegó el mom… https://t.co/RTdz3zzLrN
– Carlitos Rejala (@carlitosrejala) 1623029331000
According to investment bank JPMorgan, the use of Bitcoin as a payment method can have “potentially large limits” due to its lack of liquidity. He estimates that 90% of Bitcoins in the world are held in crypto wallets. Which means there isn’t enough Bitcoin to fiat the ongoing transactions for El Salvador to take Bitcoin and use the cryptocurrency alongside the US dollar.
A small survey conducted by the University of El Salvador suggested that 54% of the country’s citizens themselves are skeptical about the arrival of Bitcoin as legal tender.
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