Asuncion, Paraguay – The Paraguayan Congressional Energy and Mining Committee's decision to deem the cryptocurrency bill as "unconstitutional" has intensified the debate over cryptocurrency regulation in the nation.
The committee's decision is grounded in Article 285 of the Paraguayan Constitution, which grants the Central Bank the exclusive right to issue currency. The committee argues that cryptocurrencies, lacking the backing of monetary authorities, violate this constitutional provision.
Conversely, proponents of the bill assert that cryptocurrencies can contribute to Paraguay's economic innovation and growth, and they are exploring various avenues to push the bill forward.
The bill aims to establish virtual assets as Paraguayan virtual currency units, setting equivalence and exchange rates with the national fiat currency, the Guarani, and establishing a general economic, financial, administrative, and commercial framework.
The core of the controversy lies in the conflict between the Central Bank's constitutional mandate and the decentralized nature of cryptocurrencies. Concerns have been raised regarding the potential infringement on the Central Bank's authority, which is responsible for the nation's monetary policy, and the potential risks of cryptocurrency volatility on macroeconomic stability.
The reaction from the banking industry is also a hot topic of debate, as the Paraguay Banking Association (ASOBAN) is expected to show conditional support.
The committee deemed preserving the authority of the Central Bank to be consistent with constitutional provisions and national policies supporting macroeconomic stability.
The future of the cryptocurrency bill remains uncertain. Proponents may seek constitutional amendments or collaborate with the Central Bank to revive the bill.
The debate on cryptocurrency regulation in Paraguay is expected to continue. Paraguay's abundant hydroelectric power resources provide favorable conditions for the cryptocurrency mining industry, highlighting the nation's potential in cryptocurrency-related sectors.
The Paraguayan government has expressed its commitment to utilizing cryptocurrencies and blockchain technology to stimulate economic growth and foster new industries.
In this context, the committee's decision is poised to be a pivotal factor in the development of Paraguay's cryptocurrency industry.
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