Authorities in Paraguay hope to regulate the country’s emerging cryptocurrency ecosystem following a proposal submitted to the government by a crypto compliance law firm, Gresham International.
Per a report by CryptoSlate, Gresham submitted the proposal this week after being contacted by the Paraguayan government to provide information regarding the possible applications of crypto and blockchain, as well as laws that could apply to the industry.
Gresham Managing Associate Cal Evans told the news source that the government hopes to find a balance between meeting their needs as well as encouraging firms in the crypto industry to keep innovating
Among other things that the Paraguayan government required more insight on is the activity of cryptocurrency mining firms who set up shop in the country because of the cheap electricity.
The government evidently is worried that these companies currently do not pay any domestic tax from their mining profits before converting them into local fiat or foreign currency. To this end, the new regulations being planned by authorities would possibly legalize taxation for crypto mining firms and other companies in the industry.
There also were reportedly talks around setting favorable laws for cryptocurrency exchanges to encourage them to set up in Paraguay, given that the country wants to take advantage of the emerging industry to boost local and foreign investments.
Also notable is that while other countries are raving about creating a national digital currency, Paraguay currently has no such plans and is only focused on regulating the existing crypto space before the end of 2020.