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Next month, Paraguayan Congressman Carlos Rejala plans to introduce a bill to attract international mining companies and other crypto firms.
The project allows cryptocurrency companies, whether in the mining sector or in another segment, such as the stock exchanges, to finance their Paraguayan operations with cryptocurrencies, to pay dividends abroad and to capitalize their cryptocurrency profits at local banks, Rejala told CoinDesk.
Rejala, a 36-year-old entrepreneur, discovered bitcoin in 2017 and started trading in 2019, a year after taking an MP seat for the independent Hagamos party, he said.
On Monday, following the announcement that El Salvador would introduce a bill to allow bitcoin to be treated as legal tender, Rejala tweeted a photo of him with laser eyes and a line about the project.
“The announcement made me not to be afraid and to think that it can be real in my country,” he said.
The project aims to position Paraguay as the crypto hub for Latin America and a model for other countries in the region, he said, adding that if the bill is approved, it will seek to present one. second promoting the use of bitcoin as legal tender. .
It’s a long-standing goal for local business leaders, who touted Paraguay’s cheap energy as early as 2018.
“However, first we want to give Paraguay a blockchain-friendly status,” he said.
According to Rejala, one of the most attractive terms for mining companies is the cost of electricity in Paraguay, which is around $ 0.05 per kilowatt hour and is the lowest in the region. Almost 100% of production comes from hydroelectric sources.
“It’s a renewable, non-polluting energy that is extremely important to mining companies,” he said.
In a dialogue with First Mover on CoinDesk TV, Juanjo Benitez Rickmann, CEO of local mining company Bitcoin.com.py, said mining in Paraguay only requires registration and payment of taxes, which he says. classified as lower than the rest of the region. . At present, the country has a system known as the triple 10, which includes 10% income tax, 10% VAT and 10% personal income tax, has added Rejala.
The country offers no restrictions on the flow of foreign capital and the payment of dividends abroad, Rejala added. “It also makes it an attractive country for crypto investors,” he said.
Paraguay does not use all the energy it produces, said Rejala. At the Itati hydropower plant, which Paraguay shares with Brazil, the country takes only 26% of the 6,067 megawatts to which it is entitled monthly, subjecting the rest to the neighboring country, he added.
“We have a lot of energy that we sell to Argentina and Brazil almost for free because we can only sell to our neighbors,” said Benitez Rickmann.
Next steps
A bill, supported by different players in the crypto industry, has been presented to several Paraguayan government offices, such as the Anti-Money Laundering Bureau, Benitez Rickmann said.
Rejala is currently seeking to garner support to achieve the required majority of 41 votes in the Chamber of Deputies and move the bill through the Senate chamber, he said. If approved by both chambers, then it will need to be promulgated by the country’s president, who has the power to veto.
At the Bitcoin 2021 conference held in Miami, Benitez Rickmann said he spoke to a number of mining pool operators in China who have requested 100 megawatts of space.
“Maybe this is an opportunity for us to get involved with them and develop ourselves,” he said.
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