The President of Paraguay, Mario Abdo has issued an executive
veto on a recently approved cryptocurrency bill. Abdo’s veto decree
states cryptocurrency mining is an “energy-intensive” and a
low-value-added activity. The bill will now be returned to Congress to
be approved again or to be rejected entirely.
President of Paraguay Considers Cryptocurrency Mining an Energy Intensive Activity
The President of Paraguay, Mario Abdo, has exerted
an executive veto on the recently approved cryptocurrency bill, after
more than a year of discussions in the Paraguayan Congress. The project,
which was introduced
in July 2021, aims to clarify the rules by which cryptocurrency mining
operators and other virtual asset service providers must abide on
Paraguayan soil.
The proposed bill established that cryptocurrency miners should pay a
power fee 15% higher than what is paid by other similar industries.
However, Adbo’s veto order establishes that this activity is
“characterized by its high consumption of electrical energy, with
intensive use of capital and little use of labor.” The executive order
presents a bleak picture of the activity in Paraguay, predicting that if
there is significant growth in this industry, the country might be
pushed to import energy at some time in the future.
This action might slow the growth of the cryptocurrency and bitcoin
mining industry in the country. Some companies had already been examining a possible entrance into the country since the Chinese mining veto that occurred last year.
Reasons Behind the Veto
The veto answers some concerns presented by the national power
administration of the country in August. At that time, it stopped
supplying power to some miners due to the significant losses it was
facing. This was the consequence of the power theft and power metering
irregularities perpetrated by some mining companies. Officers of the
institution stated
it had registered losses of more than $400,000 monthly, declaring their
opposition to the cost structure presented in the now vetoed bill, and
their support for a partial veto move on it.
The future of the cryptocurrency bill is now uncertain, as it will
need to be sent to Congress for the representatives to accept this move
or try to pass the crypto bill again. This would not be the first time
that a president exerts his veto rights to stop a cryptocurrency-related
bill in Latin America, as president Laurentino Cortizo vetoed a similar initiative in Panam last June, citing cryptocurrency-related money-laundering concerns as the cause.
source link : https://news.bitcoin.com/president-of-paraguay-mario-abdo-vetoes-cryptocurrency-bill/
