Contxto – Another government taking a swing at cryptocurrency regulation—Paraguay. For this landlocked country, the first step towards crypto-oversight is getting a feel of the magnitude of its crypto industry.
To do this, last week the Secretary for Preventing Money and Property Laundering (SEPRELAD), announced a nationwide survey for all of the virtual asset service providers (VASPs) in Paraguay. Meaning, if a business or entity dealt in cryptotrade, the government requested they open their books.
Thereby, the entire crypto industry was to prepare for government auditing. VASPs had until December 20 to comply with the requested information.
Pressure, audits, and other regulatory affairs
What moved the Paraguayan government to look into formalizing cryptocurrencies stemmed from the Financial Action Task Force (FATF). This inter-governmental body seeks to deter money laundering and terrorist financing. For these purposes, it had laid out a series of guidelines on VASP regulation in June of this year.
Paraguay felt pressed to comply. Consequently, it developed this crypto regulation plan.
The initial step is this aforementioned survey. With the information that’s been gathered, the government will lay out a blueprint for regulation that fits the bill.
“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 regulation that adequately regulates them and mitigates the risk of misuse,” explained Secretary Minister Christian Villanueva.
Based on its findings, Paraguay plans to present its cryptocurrency regulation during the first half of 2020.
Central banks at odds with cryptos
In many Latin American countries, central banks have expressed their initial mistrust towards cryptocurrencies either because of oversight complications and/or lack of another asset to back cryptos.
Under this category are places like Argentina, Paraguay, Uruguay, and the Dominican Republic.
It’s interesting to note that despite the hesitance of these countries’ central banks, the population has been widely accepting of cryptocurrencies.
Perhaps for this reason, at least in Uruguay, monetary authorities appear to be opening up.
Related article: Why is Latin America the most crypto-friendly region in the world?