Why is Paraguay unlikely to have a Bitcoin Law?

Key facts:
  • A bitcoiner tells how in Paraguay the demand for buying cryptocurrencies and paying with them grows.

  • However, many people and even banks associate bitcoin with illicit activities.

Paraguayan bitcoiner Joaquín Morinigo Fiorio, CCO of Arapy Network and member of CryptoPy, explained on Twitter the reasons why legislation in the field of cryptocurrencies seems very distant in his country. Among them, confidence in the national currency, myths about criminal activities and the refusal of banks stand out.

Through a twitter thread, this user explained that “Paraguay has one of the most stable and oldest currencies in the region”, referring to the Guaraní, in force since 1943. According to data from the World Bank, the Guarani has always had an annual inflation rate of less than 30% (except in the late eighties and early nineties), and has been in a downward trend since then. For almost 10 years, Guarani has depreciated by less than 10 per cent annually.

Inflation of the Paraguayan currency, the Guarani, according to the World Bank. Source: World Bank.

On the other hand, @CRIPTOBOI points out that “the banks’ anti-crypto lobby is huge.” “In Paraguay, banks do not allow exchanges to open accounts or customers to use their cards to buy cryptocurrencies,” he added.

In dialogue with CriptoNoticias, the twitter user and entrepreneur commented that “in Paraguay the community cries out for the possibility that crypto cards arrive in the country so that they can spend directly on cryptocurrencies.” At present, trading cryptocurrencies with small amounts in the country is no problem, but it is difficult to “assemble the logistics” to move the money because they are large sums, he explained.

Asked about the possible reasons for this refusal of banks to operate with cryptocurrencies, even when many are branches of large banks that do in other countries, the bitcoiner said: “In my opinion, it is because most banks in Paraguay are very traditional and still fail to understand cryptocurrencies, which are in a ‘gray zone’ in Paraguay.”

For this Paraguayan bitcoiner, the regulation of cryptocurrencies in the country is not on the near horizon. Source: Twitter.

Regarding a possible adoption of bitcoin in Paraguay by more people, Morinigo Fiorio said that “a big barrier is that new people who want to enter the ecosystem encounter the problem that their bank does not let them buy cryptocurrencies with their cards.” Furthermore, “many people still have the misconception that cryptocurrencies are only used for illicit things,” he stated.

Later, he stressed that education is key in this regard, given that ” part of that taboo exists because there are many ponzi schemes in Paraguay that continue to operate.” “The day-to-day of crypto communities in Paraguay is to fight these scammers and warn everyone not to fall for such scams.”

After the formalization of the Bitcoin Law in El Salvador, Paraguay appeared as one of the countries that could follow its path; in fact, a congressman reported that he will prepare a project in this regard to present it in July, as reported by this media. However, this has not yet been made public and no further information has been made available.

Arapy Network, new blockchain project in Paraguay

Joaquín Morinigo Fiorio is the CCO of startup Arapy Network, a blockchain based on cosmos SDK for running contracts that is still in development. This will focus on ” solving problems for businesses using blockchain.”

In addition to being the first project of this type in the country, Arapy is also “the first to receive funds from the National Council of Science and Technology, which is something historic,” said the entrepreneur.

“Contracts are going to be programmed in the RUST language. When we launch the mainnet, we hope to add support for EVM (Ethereum virtual machine), ” said Fiorio, who also added that Arapy will work with proof of authority.

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