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A new bitcoin law expected to be introduced into Paraguay’s legislature tomorrow will require cryptos to be registered with the country’s Undersecretariat of State Taxation, Decrypt reported Tuesday, citing a draft of the bill it said it obtained.
“The purpose of this draft law is to establish legal certainty, financial and fiscal in the businesses derived from the production and commercialization of virtual assets,” a rough translation of the document reads. Decrypt reported that the bill was a leaked draft, without saying how it obtained it.
The bill would also regulate crypto mining as well as trading through exchanges and peer-to-peer marketplaces where participants will be required to register as “obligated subjects,” according to Decrypt’s reporting.
It’s a stark contrast to neighboring Latin American country El Salvador, which last month approved its own version of a Bitcoin Law designed to make the crypto legal tender alongside the U.S. dollar.
“It is important that companies can register these products within their accounting so that they can have their real valuation, additionally [it] helps to optimize the tax collection of this industry, finally giving traceability of what is produced in the country facilitating its tracking by supervisory authorities,” the document says.
Specifically, the rationale of the bill states that crypto mining should be seen as an industrial activity under the purview of the Ministry of Industry and Commerce because of its use of capital, labor, machinery and construction of civil infrastructure.
Congressman Carlos Rejala, who plans to present the bill, told CoinDesk last month the law would allow crypto mining or exchange companies to finance their Paraguayan operations with digital assets as well as remit dividends abroad and capitalize their crypto profits in domestic banks.
The outcome of the bill as well as its impact on Paraguay’s local economy remain uncertain.