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Paraguay’s plans to regulate the crypto mining industry have come to a screeching halt after lawmakers nixed the country’s “Crypto Law” on Monday.
The bill, which was set to create a tax and regulatory framework for crypto mining in the country, was yesterday shelved by politicians after months of toing and froing. It had already been vetoed in August when President Mario Abdo Benitez claimed mining used too much energy and brought small employment benefits to the country.
Lawmakers then rejected the president’s veto in a move that made it look like senators were on the way to regulating the industry—which operates in a legal gray area in the Latin American nation.
Though on Monday, Paraguay’s Chamber of Deputies (lower house) voted against putting it through—archiving the bill.
The proposed legislation—drafted last year by Congressman Carlos Rejala and Senator Fernando Silva Facetti—wanted to cap electricity rates for mining operations and tax the industry.
Paraguay is attractive to Bitcoin miners because of its cheap electricity—which is needed in abundance to keep the network running. But despite the shelving of the bill, some in the country’s blockchain space were happy with the result.
“From the Blockchain Association of Paraguay we were pleasantly surprised by the acceptance of the veto,” Luis Benitez, secretary of the organization told Decrypt, adding that “finally sanity prevailed.”
He said that the crypto community was working hard to educate legislators and give them a better idea of how the industry should be regulated in the country so a better bill could be drafted.
Big companies are looking to the South American country to set up shop: Canadian mining giant Bitfarms last year announced it was expanding to the country on a five-year lease with an annually-renewable power purchase agreement to secure 10 MW of green hydropower.
The decision from Paraguay's Chamber of Deputies to not move forward with the proposed regulatory framework "does not impact Bitfarms’ current operations or future plans in the region," Bitfarms General Manger of LatAm Operations Damian Polla told Decrypt.
Editor's note: This article was updated after publication to include comments from Bitfarms.