Latin America “will be the global ‘hub’ of bitcoin”: Paraguay emulates El Salvador

The country is preparing to debate a legislative initiative to convert it into legal tender.

El Salvador’s decision to accept bitcoin as legal tender has generated a wave of interest in other Latin American countries that see cryptocurrencies as an opportunity to boost their economies and circumvent some of their inefficiencies. Panama, Mexico and especially Paraguay have taken steps towards a generalized adoption of the most operated of cryptocurrencies, with important legislation to provide a new legal framework, which makes analysts think that Latin America could become a world center of reference in cryptocurrencies .

El Salvador overtakes central banks and lights up a financial hub with bitcoin

The South American country is the one that is closest to following in the footsteps of the Nayib Bukele government, as Paraguayan Congressman Carlitos Rejala and Senator Fernando Silva Facetti plan to present a bitcoin bill in Congress on Wednesday, July 14, underlining the urgency of legislators to formulate a coherent digital asset strategy for their country. “I’m here to unite Paraguay,” Rejala tweeted last Friday, adding that he and his fellow legislator are planning a “mega surprise for Paraguay and the world.”

Without elaborating on what the new legislation will entail,

It is believed that, like El Salvador did in June, it will seek to have the creation of Satoshi Nakamoto considered legal tender in the country, which will imply the same advantages that the Central American nation theoretically enjoys. But, in addition, it is speculated that the future regulations will also introduce measures to turn the country into a world center for cryptocurrency investors, businesses based on these digital assets and, most likely, miners, given the low energy prices in Paraguay.

The technology entrepreneurs of the nation go to one when defending the suitability for the nation chaired by Mario Abdo Benítez to become a reference nucleus in blockchain and strategic technology in South America. This was defended last week, during the Talent Land Jalisco 2021 conference, by a group of businessmen from this industry, who closed ranks with the fact that the country has “all the conditions”. As they explained, the largest cryptocurrency in the world could be useful for sending and receiving remittances and for electronic commerce, still underdeveloped in the country, according to their vision.

In addition, the abundant and cheap energy production in this nation works as a magnet for cryptocurrency mining companies – dedicated to the process of obtaining these assets through computational power that consumes large amounts of electricity. Asian companies expelled from their countries by the strict regulations that hang over miners, especially China where these businesses have been banned, are landing in Paraguay where energy consumption is cheap thanks to the number of hydroelectric plants it has as it is the first country in the world in terms of energy availability per capita, as explained by the businessmen meeting in Jalisco last week.

For all the above, Latin American countries have all the numbers of being a global benchmark in ‘cryptos’ due to different factors. In the first place, according to Enrique Palacios Rojo, COO of Onyze, monetarily, “its financial systems are not as powerful as in Europe and the United States, and the banking system of its population is very low, which generates a great opportunity for the world of cryptocurrencies ”; secondly, “being one of the first countries in the world to draw up strict regulations for them allows them to position themselves as benchmarks.”

Finally, adds the expert, “thanks to the energy capacities in many of these countries of the South American and Central American continent, they serve as a claim for a sector such as mining that has been expelled from China due to the prohibitions of the great Asian giant” .