The Senate of Paraguay passed a bill on Thursday that regulates the mining and trading of cryptocurrencies.
Paraguay’s Chamber of Deputies will discuss the bill in 2022, as confirmed on Twitter by Paraguayan Sen. Fernando Silva Facetti, one of the three authors of the text.
Miners – either individuals or companies – will need to request authorization for industrial electricity consumption and then apply for a license, the bill notes.
Paraguay’s Industry and Commerce Secretariat will enable and supervise crypto mining within the country, according to the bill, with the country’s National Securities Commission, Anti-Money Laundering Office and National Electricity Administration also regulating the activity.
Although the concept of exchange is not included, the bill also proposes a registry for any individual or legal entity seeking to provide crypto trading or custody services for third parties.
According to the bill, Paraguay consumes only a third of its energy production and, if regulated, crypto mining activity could reach the electricity consumption of thousands of megawatts that Paraguay currently has as surplus.
One of the main attractions for mining companies is the cost of electricity in Paraguay, which is the lowest in the region at around $0.05 per kilowatt-hour, Paraguayan congressman Carlos Rejala told CoinDesk in June, adding that almost 100% of energy production comes from hydroelectric sources.
In July, Rejala presented a bill that sought to regulate ownership and registration of crypto and crypto mining operations.