Weeks after El Salvador adopted bitcoin as a legal currency, Paraguay has also set the course for the adoption of cryptocurrency. Legislator Carlitos Rejela recently announced on Twitter that he will introduce a bill in the National Congress next month to legalize bitcoin.
This is easier tweeted than done for Rejela. El Salvador President Nayib Bukele had gone from announcement to legislation in three days flat. Rejela plans to introduce the legislation in the house where his party only has two of the eighty seats, Euronews reported. He will definitely need bipartisan support to make this a reality. It is difficult to gauge how this will play out since Rejela's draft of the bill will also be revealed next month.
He does have the support of businesses though. Group Cinco, a Paraguay-based entertainment holding company had announced last week that 24 of its businesses will accept cryptocurrencies starting July.
While countries like China and India are imposing bans on cryptocurrencies, those in South America are warming up to new opportunities following the lead of the US, UK, Japan, Canada, Australia, and the European Union who have refrained from outright bans and allowed cryptocurrencies as money businesses, if not legal tender. Businesses such as Microsoft and Tesla have already started accepting cryptocurrencies.
Environmental concerns regarding cryptocurrency 'mining' are a major drawback but South American countries may have just the right workaround for those. El Salvador, for example, plans to use geothermal energy from its volcanoes to power bitcoin mining facilities. Paraguay's energy demands are met by hydroelectric power, 90 percent of which it exports to Brazil and Argentina.
By taking away these concerns, Rejela is laying the groundwork for crypto enthusiasts and investors who are looking for safe havens after the exodus from China.
It's not just about the cryptocurrencies. Rejela's pitch is for making larger investments in Paraguay.
Can you imagine investing in the largest producer of clean and renewable energy in the world? With the lowest taxes in the region, with 10% Income, 10% VAT and 10% Personal Income tax. With the highest youth labor force and a Southern Block Market (Mercosur) of more than 500M plp— Carlitos Rejala 🙏🇵🇾🙌 (@carlitosrejala) June 18, 2021
It is likely that other South American countries might also follow this template for attracting investments into their region.