Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: Paraguayan lawmakers introduce a bill to ban cryptocurrency mining, Brazil to change crypto taxation framework, and a poll finds that Latam believes CBDCs might help combat corruption in the region.
Paraguayan Lawmakers Introduce Bill to Suspend Cryptocurrency Mining Operations
Paraguay is shifting its view on cryptocurrency and cryptocurrency mining. A group of Paraguayan lawmakers introduced a bill that seeks to temporarily ban cryptocurrency mining operations in the country due to its intensive use of electric energy.
The bill, introduced to the National Congress on April 3, proposes enacting a 180-day ban on the operation and installation of cryptocurrency mining farms and other operations involving cryptocurrency assets. This ban could be extended until a law that regulates these activities is enacted.
If the bill is passed, legal miners in the country will face an uncertain destiny. Joaquin Morinigo, founder and CEO of crypto consulting company Cryptopy, revealed that formal mining operators had paid the National Power Administration over $30 million to guarantee the power delivery to 5 unnamed sites.
Brazil to Change Crypto Taxation Framework
Brazil is planning to change the way cryptocurrencies are being taxed. A new bill that deals with investment taxation for individuals will propose to change how crypto is considered, allowing it to be taxed similarly as shared and capital instruments with a variable exchange rate.
According to the proposal to be presented in the coming days to the National Congress, crypto investors will have to pay 15% of the income of the operations made with cryptocurrency. Today, cryptocurrency gains are taxed as goods and must pay capital gains tax depending on the volumes transacted, starting at 15% for volumes lower than 5 million reais ($990,000). Transactions over 30 million reais (close to $6 million) pay 22.5%, with lower tax percentages for intermediate volumes.
Latam Believes CBDCs Might Help Battle Corruption
A poll has found that most Latam citizens believe that central bank digital currencies (CBDCs) might help curb corruption in the region. The study by Sherlock Communication, a consulting company, determined that 67% of the citizens polled in Argentina, Brazil, Chile, Colombia, Mexico, and Peru supported this idea.
In addition, seven of every ten citizens think implementing CBDCs would “accelerate payments and reduce bureaucracy.” However, the poll reveals a need for education regarding these initiatives in the region, given that 62% of the respondents stated that they don’t know enough about digital currencies.
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Source: Bitcoin
