Following significant acceptance of Bitcoin as the official currency in El Salvador earlier this month, it seems that another domino will fall in Latin America.
This Central American country made history when it voted on June 8 to make Bitcoin legal tender, a move that has been welcomed by politicians in a number of Latin American countries, including Panama, Argentina, and Brazil.
Paraguayan congressman Carlos Rejala is now leading the effort to implement legislation that would make Paraguay the second country to declare Bitcoin as legal tender.
On Twitter, he announced on June 17 that he would present a law in July at the national congress that is likely to be similar to that of El Salvador.
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In addition to introducing measures to make Paraguay a hub for foreign crypto investors, the draft law, which according to Rejala will be published on July 14, will also seek to establish Bitcoin as legal tender.
Specific details about the new law are not yet known. What is known has been gathered from information that Rejala has posted on his Twitter profile.
Bitcoin Hub
On June 7, Rejala presented his vision for the use of Bitcoin in Paraguay, stating that he is collaborating with the Paraguayan crypto community to make Paraguay a center for the crypto investment world, and subsequently place it among those at the forefront of digital technology.
On the same day, Juanjo Benitez Rickmann, CEO of the crypto exchange Bitcoin.com.py, confirmed on Twitter that he is working with Rejala to present a project in congress that would make Paraguay a crypto-friendly country for global crypto investors, leveraging the renewable and cheap energy provided by hydroelectric plants.
The excessive use of electricity in Bitcoin mining has been cited as one of the reasons why authorities in China have tightened their approach, launching a crackdown on mining operations and crypto exchanges.
A few hours after the parliamentary vote in El Salvador, President Nayib Bukele tweeted that he had instructed the state geothermal company, which produces renewable energy from volcanoes, to prepare for the use of electricity that will be used to power a Bitcoin mining facility.
In a series of tweets, Rejala also emphasized Paraguay’s access to renewable energy as an incentive to attract investment.
Almost 100 percent of Paraguay’s electricity needs are met by hydroelectric plants, while 90 percent of the total energy they produce is exported to neighboring Brazil and Argentina.
Slower Progress
What is certain is that the speed at which any law is drafted in Paraguay will be discussed and passed more slowly than in El Salvador.
Bukele introduced and adopted the law just three days after announcing his intention to do so on June 5 at the Bitcoin 2021 conference in Miami.
After tweeting his approval and intention to follow Bukele’s example, it will take more than a month before Rejala presents his draft law to Paraguayan lawmakers.
A potential obstacle for Rejala may be the ability to reach a consensus with his fellow representatives from other political factions. Rejala is a congressman from the Hagamos party, a party with only two seats in the 80-seat House of Representatives. It is still unclear whether Rejala enjoys broader support from the larger establishment parties.
However, the use of Bitcoin and other altcoins in the country is very high, as it is in much of Latin America, which has been bolstered by a recent influx of companies announcing that they will accept cryptocurrencies as a means of payment.
Last week, GrupoCinco, a large holding company in the entertainment industry based in Paraguay, announced that 24 of its subsidiaries will begin accepting cryptocurrencies, including Bitcoin and Ether, as payment options starting in July.
In an interview with La Nación newspaper on Friday, Rejala expressed pride that so many Paraguayan companies are now accepting cryptocurrencies.
– “We are proud that since we announced we are working on a law that legalizes the use of digital assets, better known as digital currencies, or its most popular version, Bitcoin, as legal tender in Paraguay for any type of commercial transaction. Various Paraguayan companies have already joined and taken a step forward into a new era of transactions,” said Rejala.
