History of cryptocurrencies in Paraguay

Do you know when cryptocurrencies arrived in Paraguay?  Do you know how and when crypto mining became present in Paraguay? Why did it choose our country?  

From TEDIC, we launched a series of investigations on the development of Blockchain technology and the arrival of cryptocurrencies in Paraguay, with a particular emphasis on crypto mining activity.

Cryptocurrencies and Blockchain technology are intervening in the transformation of economic and social structures globally. For some years now, Paraguay has been playing a role in this scenario, mainly concerning cryptocurrency mining, which is the process that allows new digital currencies to enter circulation.

“Digital extractivism in Paraguay: Historical survey on cryptocurrencies”, a research conducted by historian Belén Cantero, systematizes the most relevant events in the history of crypto mining in Paraguay, determining the milestones and periods from its origin to the present day. It also seeks to provide an overview of the different positions of the actors involved in the legislative discussion vetoed by the Executive Power on August 29, 2022.

The researcher gathered the information through in-depth interviews with key actors, an archival review of national and international media repositories, and previous studies and reports that shed light on the subject.

The paper divides the history of cryptocurrencies into three stages:

1. Cryptocurrencies timidly arrive in Paraguay (2009 – 2016)

2. Crypto boom (2017 – 2020)

3. The State and Asia enter the scene (2021-present).

The rapid drafting of a bill to regulate this activity and its approval in the Senate in just a few months makes it necessary to analyze the path followed by this industry in the country. Therefore, the paper examines the positions defended by the actors involved during the legislative process of the recently vetoed bill that “Regulates the mining, commercialization, intermediation, exchange, transfer, custody and administration of Cryptocurrencies or instruments that allow the control over crypto assets”.

Among the main conclusions and recommendations of the research, you will find:

• The beginning of cryptocurrency mining in Paraguay took its first steps parallel to global mining.

• The dynamics accelerated in 2017 with the entry of capital from foreign investors, initially coming from Brazil, and then diversifying to other countries.

• The characteristics of large-scale cryptocurrency mining, as it is being raised in our country, bring to mind the enclave economy corresponding to the post-war historical period of the late 19th century.

• The size of the investment offers and the energy consumption of such an industry puts on the table the need for regulation to provide guarantees to investors.

• The energy issue is a crucial watershed in this topic. Cryptocurrency mining could absorb a large amount of this electrical energy. The question is whether that would be the most convenient outlet for the national economy.

• The destiny of the country’s electric energy must be defined based on a broad debate that allows the designing of a national development plan that encompasses all sectors and aims at decreasing the existing economic inequality gap in the country.

We invite you to read the complete research, share it and give your opinion.  

Download it HERE!

**This publication was produced with the support of the RRF for Digital Rights in Latin America