Paraguay and Cryptocurrency
Paraguay Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
Virtual currencies are not controlled, supervised, or regulated in Paraguay. The only legal tender issued by the Banco Central del Paraguay (BCP) is Guarani and virtual currencies, therefore, have no legal course or cancellation force.[1] The BCP issued a release warning those who buy or invest in virtual currencies that any risk taken in such transactions are taken upon themselves and that virtual currencies are often used as payment instruments in illicit transactions. In addition to not issuing or supporting virtual currencies, current Paraguayan tax laws also do not cover cryptocurrency mining. In May of 2018, the Director-General of Standards and Oversight at the Secretará de la Lavado de Laundering y Bienes (‘Seprelad’), Gregorio Mayor Oxilia, became the first authority to talk about cryptocurrencies in Paraguay.[2] Mr. Oxilia warned that digital currencies are an unregulated and highly risky payment method. However, he added that the State cannot and will not attempt to slow down the development of this technology. This addition may be due to the fact that Paraguay’s primary trading partner, China, is heavily involved in cryptocurrency and blockchain projects. Despite the lack of legislation, in 2019 a small crypto news agency announced that Paraguay had settled an agricultural chemical export deal with Argentina using bitcoin, a popular virtual currency, instead of the formerly used Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system.[3]
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
- Blockchain Technology Explained: What is Blockchain and How Does It Work?
- Legal Issues Surrounding Cryptocurrency
- Cryptocurrency and Bankruptcy
- Cryptocurrency Transactions: Multi-Signature Arrangements Explained
- Cryptographic Hash Functions
- Distributed Ledgers The technology behind Blockchain brings business opportunities and legal complexities
- Hard and Soft Forks: A Detailed and Simplified Explanation of How Blockchains Evolve
- Hash Collisions Explained
- IRS Cryptocurrency Taxation: What you Need to Know in 2020
- Merkle Trees
- Mining Explained: A Detailed Guide on How Cryptocurrency Mining Works
- Preimage Resistance, Second Preimage Resistance, and Collision Resistance
- Quantum Supremacy’s Potential Impact on Cryptocurrencies
- SHA-256
- Smart Contracts
- The History of the Blockchain and Bitcoin
- Blockchain Attacks: Is No One Safe in the World of Cryptocurrencies?
- Cryptographic Hash Algorithms: An Introduction
- Overview of the Most Common Cryptocurrencies
- Double-Spending Problem and Byzantine General’s Problem in Relation to Cryptocurrency
- IRS Cryptocurrency Taxation: What you Need to Know in 2020
- Permission and Permissionless Blockchains
- The Tor Network
- Turing Completeness and cryptocurrency
- Cryptography: Public Key Infrastructure (PKI)
- Blockchain Attacks: Is No One Safe in the World of Cryptocurrencies?
- Decentralized Governance Mechanisms
- The Dark Web and the Deep Web
- The Most Common Cryptocurrencies
- Anti-Collusion | What Is Obfuscation?
- What Is Post-Quantum Cryptography?
Podcast:
Is cryptocurrency legal in Paraguay?
Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now to schedule a consultation or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.
[1] Comunicado del BCP sobre monedas virtuales o criptomonedas, May 31, 2019, https://www.bcp.gov.py/comunicado-del-bcp-sobre-monedas-virtuales-o-criptomonedas-n1153
[2] Ultimahora, “Seprelad acompaña uso de criptomonedas, pero alerta sobre riesgos”, May 13, 2018, https://www.ultimahora.com/seprelad-acompana-uso-criptomonedas-pero-alerta-riesgos-n1147455.html
[3] “De Argentina a Paraguay: Por primera vez se realizó una exportación, a través de la aduana, utilizando bitcoins”, Fernando Quiros, February 14, 2019, https://es.cointelegraph.com/news/from-argentina-to-paraguay-for-the-first-time-an-export-was-made-through-customs-using-bitcoins?_ga=2.18357370.2128745333.1622215165-2116175141.1622215165
