Paraguay and Andorra are adopting bills aimed at regulating the cryptocurrency market. Paraguayan regulations will require miners and crypto traders to obtain a compulsory license to work with digital assets, while Andorra’s crypto law provides for creating a government virtual currency.
Government agencies in different countries continue developing legal regulations for the cryptocurrency market.
Miners and Crypto Traders in Paraguay Will Have to Be Licensed
The Senate of Paraguay approved a bill aimed at regulating crypto mining and commercialization of crypto-assets. This was reported by the local media.
A bill to regulate the cryptocurrency market was first introduced by Paraguayan senators Fernando Silva Facetti and Carlos Rejala in December 2021. However, after several amendments, the Paraguayan Chamber of Deputies did not approve it until May 2022. Last Thursday, the bill was presented to the country’s Senate for debate, thereby receiving approval from both government chambers. The bill’s fate will depend on Paraguayan President Mario Abdo Benítez, who can pass or veto it.
According to the bill, the Ministry of Industry and Commerce will take over the regulatory duties. The agency would be allowed to take appropriate measures to regulate the crypto market, such as issuing digital assets permits and fining unlicensed trading or mining.
Subsidiary supervisory bodies would also be:
- The National Electricity Administration. The agency will be responsible for electricity consumption by mining companies or single miners.
- The Secretariat for the Prevention of Money and Property Laundering. It will be in charge of monitoring investment processes carried out by crypto companies.
- The National Securities Commission. The institution will be responsible for the commercialization of the received assets.
Notably, many countries are concerned about green cryptocurrency mining and the reduction of energy consumption by mining companies. For example, the New York State Assembly passed a bill to shut down mining farms that do not use green energy. And the government of Kazakhstan adopted new differential tax rates tied to the price of electricity consumed for mining cryptocurrencies.
Andorra Plans to Issue Sovereign Money
The General Council of Andorra approved the Digital Assets Act, a regulatory framework for digital currencies and blockchain technology. According to the local media, the law on cryptocurrencies provides for the government to create a virtual currency, “sovereign money,” based on distributed ledger technology (DLT).
Andorra’s Digital Assets Act can be split into two parts:
- The creation of “programmable digital sovereign money” (DSDP), which is essentially the creation of a government token.
- The creation of a legal framework for regulating digital assets as financial instruments based on blockchain technology.
Andorra’s DSDP digital token is a currency that will act as an official means of payment according to the government’s plan. The token will be financed through the issuance of government bonds.
The initiative to create a state cryptocurrency comes from David Montané, General Counsel of the Andorran Democratic Party. The official said that the country would “democratize investment” with the help of this law.
The Andorran Financial Authority (AFA) will act as the main regulator and will be responsible for controlling the new sector. In particular, the AFA will issue permits for digital assets, their creation, and their use as a means of payment.
The CAR government is working on the state digital currency as part of the Sango crypto hub project. The Central Bank of the Philippines has also recently issued innovative blockchain-based peso bonds that have raised about $209 million.
