Paraguay, one of the countries touted to follow in the footsteps of El Salvador in accepting Bitcoin as a legal tender, has dashed the expectations of the crypto community with the recently presented bill by its lawmakers.
While many had expected that lawmakers in the country were going to present a bill that would allow the recognition of the leading digital asset as a legal tender, instead, they presented a bill which seeks to control and regulate crypto transactions and also impose taxes.
The bill, presented by deputy Carlos Rejala and the liberal senator Fernando Silva Facetti, stated in explicit terms that “Digital assets are not legal tender currencies used by the Paraguayan State, and for this reason they are not backed by the Central Bank of Paraguay.”
The law also proposes that the central bank of Paraguay be made the comptroller of all crypto-related entities within the country. It continued that its aim is to “regulate crypto transactions for the state to collect taxes for trading and other use cases.”
Senator Facetti, when questioned on why a different kind of bill was submitted to the house responded that “this is not a legal tender, this is a commodity and the purpose of the law is to regulate and control this industry. That is the base project that we really have today.”
Paraguay’s new “Bitcoin” bill also views Bitcoin mining and trading as activities under its scope. The bill proposed that mining-related imports within the country should attract a 5 percent tax while individuals looking to trade the digital asset must be licensed annually by an institution of the state.