Crypto
Paraguay announces national cryptocurrency audit
Paraguay is taking a closer look at its crypto industry. The country’s head of anti-money laundering (AML) efforts announced a nationwide audit last week to help formulate domestic crypto regulation. As per the Paraguay cryptocurrency regulation report, crypto-related activity in this region has a 2.4/10 safety rank. The government will hope that new regulations will tame the local crypto market.
Last week, Paraguay’s anti-money laundering (AML) chief, the Secretary for Preventing Money and Property Laundering (SEPRELAD), announced a nationwide crypto survey. All Virtual Asset Service Providers (PSAV) in Paraguay were ordered to open their books to the government for the first time. The information was due on December 20. The mass audit will help the Paraguayan government understand its national cryptocurrency industry,
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Paraguay is evaluating its local crypto sector in advance of new regulations
This local exploration will pave the way for the country’s first specific crypto regulations to be implemented in the first half of 2020. “The data obtained will be used to measure the degree of adoption, complexity, and size of the virtual asset market in Paraguay, with the purpose of drafting a policy document that regulates them adequately and mitigates the risk of misuse,” said Secretary Minister Christian Villanueva.
Never before this landlocked nation regulated cryptocurrencies. Although its central bank warned the public last June that only the Guarani currency is legal tender.
Crypto enthusiasts in Paraguay will not be very happy
Paraguay has largely avoided the problem. In a country dominated by unofficial business, the IMF estimated that informal employment accounts for “more than half” of total employment in Paraguay. The regulation of bitcoin was an afterthought.
The FATF’s regulatory guidelines of June 2019 increased pressure on Paraguay to develop cryptocurrency standards, according to Villanueva. Recommendation 15 of the FATF guidelines expanded the AML benchmarks to include technologies such as “virtual assets”.
Now, with its new directive, SEPRELAD puts Paraguay on the path of compliance with Recommendation 15 before the end of 2020. Miners, over-the-counter (OTC) shops, exchanges, and other PSAVs will have to register with the government. To implement basic supervision over their customers’ activities, with anti-terrorist financing (CFT) protocols and AML safeguards.
Paraguay is part of a growing trend of crypto regulations
Cryptocurrency has been an increasing focus of government and financial institutions. While crypto has yet to return to its highs of 2017 and 2018 many governments still consider it a threat to their own fiat currency and an easy way for criminals to conduct illegal activities.
Some nations, like Venezuela and China, have chosen to take control of the technology in an attempt to ensure that only government run crypto is used. Others, such as Canada, have opted to treat cryptocurrency like a security, which makes Bitcoin too burdensome to use a day to day currency, essentially eliminating the threat to the Canadian Dollar.
Despite this concerning trend of crypto regulation there are some positive signs. Germany has opened up the possibility of keeping cryptocurrency in an official state bank account, essentially legitimising the currency, without attempting to take direct control of its direction.
One thing is for certain, governments are finally beginning to take crypto seriously and 2020 may well be the year that crypto hits the mainstream, although it may not be in the way that crypto enthusiasts hoped it would.
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(Featured image by Icons8_team via Pixabay)
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